HBOS Group Reorganisation Bill
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	Order for Third Reading read.
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	To be read the Third time on Wednesday 19 April.

Harriet Harman: On 22 March, the Legal Services Commission announced that it had reviewed its earlier decision to terminate those contracts, and had informed providers that the contracts will continue.

Nia Griffith: I am sorry, Mr. Deputy Speaker, I tabled the question before the decision was announced, which is why I wished to amend it. Can the Minister confirm that she will ensure that there is full consultation of all the relevant bodies, including the Welsh Assembly Government in the case of the Welsh specialist support service, and that she will announce the responses on the Floor of the House?

Jonathan Djanogly: We welcome with some relief the announcement by the Legal Services Commission of its intention to postpone its earlier decision. The Minister did not mention that the Government supported the Legal Services Commission in the ending of funding for specialist support services. However, with reference to the proposed review, is the Minister aware that the vast majority of affected lawyers do not want the cuts and believe that they will not save money and will create an even larger shortfall in provision, affecting primarily the poorer and most vulnerable in our society?

Bridget Prentice: The pay offered by the Department for Constitutional Affairs is generally competitive and enables us to employ staff with the skills that we need to provide good quality public services while making the best use we can of the resources available.

Harriet Harman: Implementation of the new enforcement framework under the Courts Act 2003 was completed yesterday. It includes measures to elicit prompt payment and severe sanctions for defaulters. From April 2007 the National Enforcement Service will build on current initiatives to strengthen enforcement of all court orders across the criminal justice system.

Harriet Harman: CLS Direct, which allows people to phone up and get early legal advice, is an important service that is doing an important job, and it is going to expand. However, I agree with my hon. Friend that there is a problem, which particularly applies to poorer people in socially excluded areas, with getting access to family and civil legal aid. The truth of the matter is that we have greatly increased the legal aid budget since we entered government in 1997. Despite the fact that there have been fewer criminal cases in the courts, most of the increase—in fact, nearly all of it—has gone on criminal legal aid, and civil and family legal aid has experienced a cut of £200 million or about 24 per cent. I hope that all hon. Members will join me in trying to make sure that we get a fairer balance within the increased legal aid budget between family and civil legal aid on the one hand and criminal legal aid on the other.

Bridget Prentice: My apologies for my slow response, but I did not catch the hon. Gentleman's question the first time. The Prime Minister has already said that he is relinquishing his role in the honours system. We will examine House of Lords reform in the round, and there will be a debate on both the composition and processes of the House of Lords. My hon. Friend the Member for Dundee, West (Mr. McGovern) has a view on whether the House of Lords should be entirely elected, and the matter will come to this House as a free vote. The Government have set up the Appointments Commission, and we want to ensure that representation in the House of Lords fairly reflects the wishes of this House.

Nigel Griffiths: The Prime Minister has already made it very clear that he wishes to stand aside from taking such decisions on nominations, which will require legislation in this House and full co-operation. I think that the hon. Member—[Hon. Members: "Right hon."] I am sorry. I think that the right hon. Member should perhaps have declared her close interest in this. I understand that the tax exile, Lord Ashcroft, made a contribution of some £25,000 to her election campaign. She would have done well to tell the House that, and also to tell the House that she will now disclose all the loaners to the Conservative party.

Nicholas Winterton: I thank the Deputy Leader of the House for that non-reply, which was courteously delivered. Does not he accept—as the Leader of the House will accept, since he attended a Hansard Society seminar this morning—that most other legislatures in the world have a business committee? The devolved institutions—the Assemblies in Wales and Northern Ireland and the Parliament in Scotland—have Business Committees. Does not the hon. Gentleman believe that it would help the House to have a business committee and thus bring the business closer to the people who comprise the House, not only Ministers?

Don Touhig: With permission, Mr Deputy Speaker, I would like to make a statement about the outcome of the review that I announced on 12 December 2005 of the Government's ex gratia payment scheme for former far east prisoners of war and civilian internees.
	The review has been thorough. It has been an immense undertaking, requiring a check of nearly 30,000 claim and policy files to determine whether consistent eligibility criteria had been used for civilian internees over the life of the scheme. The review has confirmed that the eligibility rules, based on the 1950s Japanese asset scheme, were the basis for making payments between the introduction of the scheme on 7 November 2000 and March 2001.
	The civilian eligibility criteria under the 1950s scheme were based on normal residence in the United Kingdom at the time of internment. We now know that that was not consistent with the birth-link criterion introduced from March 2001. The birth-link criterion was introduced to expand eligibility, not restrict it. Consequently, the number of former civilian internees who qualified increased by 40 per cent. However, some 245 claimants who were paid under the Japanese asset scheme criteria cannot, on the evidence available, be shown to meet the birth-link criterion.
	Furthermore, some 25 claimants who would have met the Japanese asset scheme criteria were denied payments because they failed to meet the birth-link criterion. Fewer than 20 claimants were paid in error around the time of the introduction of the birth-link criterion, apparently on the basis that they were recorded as British on contemporary camp lists.
	I have considered a wide range of options for how we should proceed in the light of those inconsistencies. I have listened to the views of the Association of British Civilian Internees of the Far East Region. I have met the chair of the all-party group on far east prisoners of war and internees, my hon. Friend the Member for Hendon (Mr. Dismore) and other colleagues.
	I have also looked again at the principle that to qualify, claimants should have a close link to the United Kingdom. That principle has underpinned the scheme from the start, and the fact that decisions were originally based on a 1950s scheme whose criteria included normal residence in the United Kingdom before internment is consistent with that. I have considered very carefully whether this is still a reasonable basis for the Government's definition of those to whom the country owed a debt. I have concluded that it is—a view that was supported by the courts.
	I understand the argument put forward by many that all those who were British subjects at the time—and interned on that basis—should qualify for a payment. However, anyone born in a British colony was a British subject, and many of those people are now the citizens of a country that was given independence, and have never had a close link to the United Kingdom. I have therefore concluded that the right course of action is for there to be a further widening of the scheme to include those who have made some clear commitment or contribution to the United Kingdom.
	On that basis, I have decided to make certain changes to the criteria for civilian internees. First, I am clear that we must include those who were rejected under the birth-link criterion but who would have met the Japanese asset scheme criteria, whether or not they had a Japanese asset scheme record. It would be unfair and improper if, as a matter of policy, claimants who were identical in all significant respects should have succeeded before March 2001 but failed thereafter. These rules will also apply to new claimants.
	Secondly, I have decided to introduce a new provision to include those who have resided in the United Kingdom for at least 20 years since world war two, until November 2000, when the scheme was introduced. I have had discussions with the all-party group and with ABCIFER, and I have listened to their views. Indeed, I pay tribute to my hon. Friend the Member for Hendon and his colleagues, and to Ron Bridge of ABCIFER, whose comments and advice have been extremely helpful as we have all sought to resolve the matter before us. I have chosen the figure of 20 years as a reasonable measure of an individual's commitment to the United Kingdom, meaning that they are likely to have spent at least part of their working life here. This is consistent with the original principle that British civilians should have a close link with the United Kingdom in order to qualify.
	Eligibility will go to anyone who was alive on 7 November 2000, when the scheme was introduced, or to their spouse or estate if they have since died. It will also extend to members of the armed forces of our former colonies, including the Indian army, who similarly meet this residence requirement and were held as prisoners of war. We have previously had reservations about a residence criterion because of the difficulty of providing supporting evidence. However, the 1950s scheme was residence based, and we expect the numbers now to be much smaller, both of which considerations suggest that the task before us should be manageable.
	We also need to resolve details of how the 20-year rule should be applied. We will publish details of the qualifying criteria as soon as they are agreed, and I would ask potential claimants not to apply until then, so that when they do so they can provide the evidence required to process their applications. To that end, I can announce that ABCIFER and the chair of the all-party group on far east prisoners of war have accepted my invitation to join me in a working group to consider how we should take forward these points and resolve them. We assess that the change could admit some 500 new claimants, although the figures cannot be estimated with certainty.
	I should also comment on the birth-link criterion. This was found by the High Court to have resulted in unlawful indirect discrimination. The judgment is the subject of appeals from both sides, and I have decided that we should not take any decisions on its future until that appeal is resolved. The review has shown that, in part at least due to the scale and urgency of the desire on all sides to make payments, there have been shortcomings in administration of the scheme. Those are the subject of a separate ongoing investigation due to be completed in the summer, and I will make a further statement to the House at that time. But our review has shown that the numbers adversely affected—that is, those who met the Japanese asset scheme criteria but were rejected because they did not have a birth link—represent a very small proportion.
	I apologise deeply for the fact that a number of people did not receive the payment that they should have received. We will address those cases as a matter of urgency, in particular contacting those whom we know to have been affected. The Government have made payments in excess of £250 million since the scheme was introduced, and more than 25,000 people have benefited.
	I hope that right hon. and hon. Members will recognise that the steps I have announced today address the one outstanding group who could reasonably claim to have a close link to the United Kingdom based on residence since the war. I am confident that the revised eligibility criteria are a fair reflection of our country's debt to those for whom it could be reasonably said that we have a responsibility. On that basis, I ask the House to support the scheme that I am announcing today, and I commend this statement to the House.

Mark Harper: First, I thank the Minister for advance notice of his statement. I welcome the widening of the scheme announced today and his further apology to the House—the fourth that he has had to make. I also welcome his promise that he will deal as a matter of urgency with those who have not received the payment that they should have done. I am afraid that that is as far as my welcome can extend.Following such a thorough and lengthy review—nearly four months in the making—the House could reasonably have expected a comprehensive statement resolving all the outstanding issues and bringing matters to an honourable conclusion. That is not what we have.
	I have some questions on the statement. For the avoidance of all doubt, can the Minister confirm that the first change to the criteria means that the 13 claimants to whom he referred, who would have met the Japanese asset scheme criteria but were denied payments because they failed to meet the birth-link criterion, will now be paid the £10,000? Can he confirm when they can expect to receive payment? In answer to a written question that I tabled, the Minister confirmed last week that 162 cases were awaiting decision. I would be grateful if he would update the House on when he expects those cases to be decided.
	Given that problems have arisen with the scheme—which, I acknowledge, was welcomed on both sides of the House—because, as the Minister acknowledged, the Ministry of Defence did too much in haste and was not clear about the details, I am concerned about the way in which he made the announcement about the 20-year rule. He has admitted that the details of how the rule should be applied have not yet been resolved and that the number of new claimants cannot be estimated with certainty. There is a danger that he will have raised expectations again, only to see them dashed when the details are resolved. Given the history of this scheme, does he agree that it would have been better to conclude the work on the details prior to today's statement? I welcome the inclusion of ABCIFER and the chairman of the all-party group in the working group to resolve those details, and I would be grateful if the Minister could confirm when he expects those details to be finalised, and when he will be able to publish them.
	The Minister touched briefly on the birth-link criterion. Recognising that legal action is ongoing, if the result of the appeal goes against the Government, will he commit to coming to the House at the earliest opportunity thereafter to make an oral statement setting out the implications for the scheme?
	The Minister also mentioned the investigation being conducted by David Watkins, and confirmed that he expects the final report to be available to him by the end of June. In answer to a written question, he confirmed to me that he will make a statement to the House as soon as possible after that. Will he also confirm that he expects that to be an oral statement, enabling Members of the House to raise the questions that they will no doubt have?
	Finally, can the Minister say when he expects to be able to report to the House that the whole matter has been resolved, that all outstanding issues have been cleared up, and that he will not have to return to the House to make further statements?

Don Touhig: I welcome the hon. Gentleman's welcome of my announcement—and I have no problem in coming here four, five or 400 times to apologise. If we have got something wrong, we should own up and apologise. That has been my policy, and it is the policy of this Government.
	The hon. Gentleman raised several points, to which I shall seek to respond. Yes, we have identified 13 claimants who have not been paid. I would want that matter resolved as quickly as possible, and if there is any doubt, it would be resolved in favour of the claimants. Yes, a number of claims are yet to be decided—he mentioned the answer that I gave him about the 162 cases. I want to be certain that we get the criteria absolutely right before I reintroduce payments under the scheme, and I hope that the House will bear with me on that.
	Yes, the scheme was introduced in haste. Everyone, on all sides, felt that it was time for us to show our appreciation and sense of value, given the horrible suffering undergone by some of the people concerned. It was felt that that should be recognised properly. We tried to do it rather quickly, and—as my statement made clear, and as will doubtless be made clear in the report that I will present to the House later this year—we did not get it right, perhaps because of the speed with which we were acting.
	I cannot give a view on the details of the 20-year rule at this stage. The delay does not mean that I do not have views, or that work has not been done. I have been hugely impressed by the advice and information given to me by ABCIFER, and by my hon. Friend the Member for Hendon. For that reason, I want to involve them in the working group so that we can get the criterion right. I do not want to come back and say, or hear my successor say, "Sorry, we got it wrong again." I want to take account of the important contribution made by ABCIFER and by my hon. Friend, and to do a bit of work on that criterion. I hope that the first meeting of our working group will take place immediately after the recess, and that a week or so later we will announce the details of the criterion that will apply to the 20-year rule.
	The hon. Gentleman mentioned the birth link. If at the end of the day the appeal is lost and the birth link criterion is declared unlawful, we shall not be able to proceed with it. My original ambition was for an arrangement allowing people to qualify under the Japanese asset scheme, plus the birth link, plus any other grounds for qualification; but if the birth link proves to be unlawful, that will not be possible.
	I am always pleased to come back to the House and make an oral statement, and I shall press for such a statement—but of course that is not entirely in my gift.

Don Touhig: I accept that there are others, although I cannot be precise about the numbers that the hon. Gentleman gave. I will make inquiries, and give him the figures that are available to us.
	There is clearly an issue. As I have said, people feel that because they were interned as British by the Japanese, they should be paid under the scheme regardless of whether they have any link with this country in the sense of ever having lived here. We do not share that view; we take the view that there should be a close link with the United Kingdom. That is why we originally introduced the birth link, and why I now propose to introduce a criterion of residence.
	The hon. Gentleman spoke of the problems that we have experienced with the scheme. But as an old friend of mine, Dick Murray—a Dubliner and a lovely fellow who, sadly, has now died—would say, "If I were going in that direction, I wouldn't start from here." Clearly there are lessons to be learnt.
	I have had some wonderful letters from people around the world saying how much they appreciate what we have done. I had one today from a 96-year-old lady who does not qualify, but who received an apology from me and £500 in recognition of the maladministration that the ombudsman said was the fault of the MOD—a judgment to which we responded. The lady says in her letter:
	"It is a testament to the integrity of the British people that they have assisted and respected their aged subjects who were the prisoners of war of another nation."
	She also invites me to visit her in British Columbia, and gives me her telephone number.
	I think that what we have done thus far is well appreciated, but I take the hon. Gentleman's point, and I will get back to him about the numbers.

Don Touhig: I thank my hon. Friend for his comments. We have a very constructive and useful working relationship, and as I said in response to the hon. Member for Forest of Dean (Mr. Harper), my hon. Friend and ABCIFER have an important contribution to make in helping me to get the criteria right, and I look forward to ensuring that we do so.

Henry Bellingham: Is the Minister aware that more than 2,500 Royal Norfolks were captured by the Japanese when the Singapore garrison surrendered? All those prisoners of war suffered appalling brutality, and many died on the River Kwai rail project. There are very few survivors left, but many impoverished widows. Of course I welcome today's statement, but does the Minister agree that it is a disgrace that the Japanese Government have not given more money to the survivors—more than about £100 or so per prisoner—and that surely the second richest country in the world should be doing more to help those survivors, and the impoverished widows who are still left?

Don Touhig: Yes, I will certainly do that, working within the framework that I have announced today. A number of colleagues will know that I have been very much involved with the miners' compensation scheme—I have 500 cases in my constituency—and I share the point made by my hon. Friend: what is important for most people is not money but recognition for the suffering, pain and horrors that they endured. We as a country must recognise that debt of honour; this is a tangible way to do so. There is no way that we can ever put right the wrongs and horrors that those people suffered.

Charles Hendry: I thank the Minister for the statement, and specifically for the tribute that he has paid to my constituent, Ron Bridge of ABCIFER. I hope that the hon. Gentleman will agree that this a very good example of lobbying—quiet, constructive, fact-based and very persistent. Will he say a little about whether the scheme will be retrospective? A lot of the people eligible will be elderly, but some people whose eligibility for the extension will now be established may already have died. Will the scheme cover eligible people who have died, and will the money be paid to their families?

David Burrowes: I welcome the Minister's statement, and I commend the work of ABCIFER and the cross-party pressure applied by a number of Members, particularly as it affects Diana Elias, a constituent of mine. Nevertheless, is the delay that has led to this situation not a travesty? To get to this point, the Government have had to be dragged through the courts, and to deal with both the parliamentary ombudsman's complaints and the Public Administration Committee. Will the Minister confirm that he will fully adopt the ombudsman's recommendations, and will he recognise the fact that for constituents such as Diana Elias, the fight not to be treated as a second-class citizen—as someone who is "not quite British enough"—has taken not five years but 60 years to win? In that time, Mrs. Elias's sister and cousin have died, and her brother-in-law has recently been diagnosed with cancer and has only a few months to live. Will the Minister acknowledge that although one could say, "Better late than never," for many it is indeed too late, and they have died as second-class citizens?

Andrew MacKinlay: Last time, I asked the Minister to deal with the question of civilian and service volunteers who now live in the Irish Republic—or the Irish Free State, as it used to be. Will my hon. Friend clarify the position of those people, and how the announcement will affect them? Several hon. Members have, over the last 20 or 30 years, raised the question of parallel circumstances in Germany. I. G. Farben, for example, held and used people not under the Geneva conventions, but as slave labour. I urge the Minister to stick his chest out and remember that eight Conservative Prime Ministers, under 31 years of Conservative government, did nothing to address this issue. He should be proud to have been able to implement the change, notwithstanding the hiccups and shortcomings.

Phil Willis: I apologise for arriving just after the right hon. Gentleman started his speech. On research and development, and, especially, pulling what I call the basic research out of universities and into wealth creation, why did the Chancellor not examine in his Budget statement putting solid third-stream funding into the research councils and making that available to industry? Without that, surely we will start robbing Peter to pay Paul by taking out basic research money and applying it to knowledge-transfer and third-stream-funding systems.

Alan Johnson: I have dealt with Budget resolution 47.
	The microgeneration strategy will examine how we can tackle the obstacles to take-up. In particular we will look at the planning regime, the potential rewards available from exporting electricity back into the grid and the possibility of developing an accreditation scheme, so that people know which products and installations to trust. We will also work with the industry to develop a scheme for installing microgeneration in schools so that we can educate the next generation about the need for energy efficiency and renewables.
	It is vital that British business takes advantage of new energy-efficient technologies to reduce its costs and help the environment. Over the next 10 years up to £1 billion will be invested in a new national institute for energy technologies in a 50:50 partnership between Government and business. BP, EDF Energy, E.ON UK and Shell have already expressed interest in taking part.
	We will also bring forward a detailed consultation on what more we can do to promote large scale commercial deployment of carbon capture and storage. As the Budget and the current energy review show, we are serious about tackling climate change and will take the tough decisions necessary to deliver real reductions in carbon. We have seized the agenda since 1997. As a result, we have beaten our Kyoto targets.

Alan Duncan: I have watched all 10 of the Budgets delivered by the Chancellor, and none of us who has watched him doubts that they are always skilfully honed. He is a master of propaganda rather than enlightenment. We have long since learned that what is in the Budget on the day is not what matters and that most of the pain lies in the small print that is not announced on the day.
	All Budgets need time to settle for everyone to digest them. This Budget does not involve great drama, because there is no fundamental restructuring or revolutionary changes of gear. There is no real point in engaging in an auction of hyperbole in which one side says that the Budget is all fabulous and the other says that it is all disastrous. This Budget needs a more dispassionate assessment of the context in which it has been designed. [Interruption.] Even in this House, there are moments to stand back and consider the long-term trends, which is exactly what I want to do today.
	I shall admit something else to enliven the House. Some say that the two sides of this House have so converged that one can no longer tell us apart, but they are totally wrong. Labour has had to prove over the years that it understands and embraces market economics, while we have had to reassert our belief in social justice, but what divides us is tax and the power of the state. The Chancellor is inclined to tax anything that moves and do anything that he can get away with; we believe in lowering taxes wherever possible and that any new tax must be justified. The Chancellor believes that state action and centrally directed initiatives are the solution to most national problems; we believe that the creativity and aspiration of the individual, free from state interference, is the greatest engine of progress and improvement. We appreciate more than the Chancellor that only private prosperity can pay for public services—when we think of wealth, profit and prosperity, we say, "Go make it", while he says, "Go take it".
	The Chancellor makes much of his fiscal rules: first, that he should balance the budget over the economic cycle, and secondly that he should borrow for investment, not merely for spending. However, he took some pride in rejecting what he called a third fiscal rule, namely that spending should rise more slowly than growth. Perhaps that policy marks the difference between us, because it contains both a grave admission and the seeds of its own destruction. If spending increases more slowly than growth, then the state takes a smaller proportion of GDP. If spending increases ever faster than growth, which is the opposite of the fiscal rule that he has rejected, then the state takes an ever-larger proportion of GDP, which leads to more spending, higher taxes and greater borrowing—what was 40 per cent. can become 50, 60, 70, 80 or 90 per cent. The effect is a bit like flesh-eating bacteria: it is so self-consuming that if one were to carry the Chancellor's course to its logical outcome, the British economy would disappear up its own origins. But fortunately the people can stop it.
	Everything is up against its limits. That is not my opinion, but that of the Minister for Higher Education and Lifelong Learning, the hon. Member for Harlow (Bill Rammell). I have a little clip that states:
	"A Government minister who admitted that Labour had taxed people to 'the limit' was rebuked by the Treasury last night"—
	[Interruption.] I am told that that was quite right. It continues:
	"Bill Rammell, the higher education minister, said, while launching a White Paper on further education: 'We are probably about at the limit of what people are prepared to pay to improve public services.'
	The Treasury issued a firm rebuke to the minister".
	The Chancellor is running out of tricks and wheezes to expropriate any more revenue, but that admission signifies what is to come. With a majority of only 97 in Harlow, the Minister knows something about being up against his limits.
	The danger is that the Chancellor will run out of flexibility. As The Economist said:
	"If, for example, the economy runs into trouble later this decade, then his plans for apparently modest public spending growth may yet prove unaffordable, just when they might be most needed. The chancellor was fortunate to inherit a strong economy whose public finances were improving sharply. If Mr Brown's inheritance as prime minister is a weakening economy and a chronic budget deficit, he will have only one person to blame: himself."
	This is the Chancellor who has doubled the council tax and destroyed pensions. This is the Chancellor who is guilty of causing the pain of ever-rising council tax and who is guilty of the unforgivable larceny of seeing the best-funded pension provision in Europe reduced to ashes.
	It is not the little announcements in the Budget that will be dwelt on, but the underlying trends and pressures that Britain faces. It is not a million quid here or there, but the incidence and burden of tax and our competitive position and skills base that will determine our prospects in the longer term.
	Even now we can see that the Chancellor's favoured structures are coming under strain. NHS deficits are a major crack in his ill-crafted model of public services. He can boast about the extra billions, but not only do they have to be paid for, they are not solving the problem. We do not have a perfect national health service: we have deficits, closures and lay-offs. He may well have doubled his spending, but now he will have to double the size of the House of Lords to pay off the deficits.
	Competition in the modern world is becoming more and more ferocious. Comparative weakness can be seized on, with the swift transfer of capital to better options. Comparative advantage is more and more difficult to define and retain. Mature economies such as ours, with higher welfare costs and high social standards, carry those costs while having at the same time to compete with the likes of India, China and eastern Europe—all at a different stage of development. Our fortunes will not be shaped in any sudden way by the contents of one Budget. They will be determined by the gradual and continuing force of global competition. Despite what the Secretary of State for Trade and Industry said a moment ago, there are some very worrying trends.
	Britain has dropped from fourth to 13th in the World Economic Forum competitiveness table since 1997. Just today, we learn that The Economist intelligence unit survey of how favourable a country is for foreign investment shows that the UK has fallen from fourth to seventh, because of concerns about tax levels, regulation, poor transport infrastructure and low levels of productivity. It is no triumph to be overtaken by Finland, Holland and Ireland.
	Productivity growth has slowed under this Labour Government and, last year, it actually fell to zero for a time. Under the last Conservative Government, we were catching up with France and the USA, but under this Government we are losing ground. Last year, business investment, at 9.1 per cent. of GDP fell to the lowest level since records began and the number of new companies registered actually fell.

Alan Duncan: My hon. Friend is absolutely right. The hazardous waste directive banning the use of lead in new electrical products appears to threaten the restoration and building of church organs. We were partly heartened by the response of the Minister for Industry and the Regions, the right hon. Member for Cardiff, South and Penarth (Alun Michael) in Trade and Industry questions last week. He said that restoration would not be subject to the directive, but he was ambiguous and ambivalent about whether newly built organ pipes would be exempt and said that they would have to apply for an exemption. Will the Secretary of State apply for a general exemption on the industry's behalf, or will each company have to apply for an exemption individually?

Alan Duncan: He declines to tell the House. He should be on top of the issue and able to tell us. The Budget is about the prosperity and success of business, many of them small businesses such as those that make and restore organs. If the Secretary of State is not prepared to tell us whether they are going to be able to survive the regulatory regime that we are discussing, he is not doing his job properly.
	I have found no end of examples of directives, many of which would suffice as a paragraph but are, when they come to us, seven, eight or nine pages long. We have the Food (Jelly Confectionery) (Emergency Control) (England) (Amendment) Regulations 2004, which runs to six pages, and the Food (Jelly Mini-Cups) (Emergency Control) (Scotland) Regulations 2004. When I wrote my election address, little did I appreciate that we were so severely at risk from an imminent invasion of jelly cups. Those who show enough enterprise to start or run a business quickly find themselves swimming in treacle. They immediately get an enormous book. We need a "Treacle Swimming Emergency (Britain) Order" to rescue their prospects. Any business person faces an enormous burden and uncertainty under the Government.
	The operating and financial review was a sad and sorry tale. Was the Secretary of State told about it before the Chancellor abolished it? [Interruption.] One Minister claims that he was while the Secretary of State shakes his head. The Chancellor abolished the operating and financial review. Companies subsequently said that they would prefer to have it because they had spent all the money preparing for it. The Chancellor then said that we would have it back. A statutory instrument was passed to get rid of it but it remains in the Company Law Reform Bill. That is a mess. Businesses need certainty and consistency so that they can decide how to invest and know how they spend their money.

Alan Duncan: The hon. Gentleman is right. The Department website stated:
	"One of the most effective ways of realising the potential of the workforce and the organisation is for employers to make computers for home use available to as many employees as possible. Basic computer and technology skills are now regarded as essential for the majority of jobs . . . Home Computing Initiatives . . . are an extremely powerful catalyst for any organisation that wants to exploit the clear and indisputable link between individual learning, workplace productivity and overall competitiveness."
	The Chancellor has not only scrapped those initiatives and is sending a bill to many employees, but work-life balance goes out of the window.
	There have also been some strange announcements about corporation tax. Two changes were announced. First, the 0 per cent. rate has been abolished—the Institute for Fiscal Studies described that as an "unfortunate experience". The Chancellor made the bizarre claim in the Budget that that "simplification" would save business £9 million. Secondly, thresholds remain unchanged and have not even been uprated with inflation. We now have more corporation tax than Sweden.
	Eight years into the Government's tenure, there are 3,000 business support schemes. Every time the Chancellor opens his mouth, he seeks a headline and launches a scheme. Eight years on, there are so many that they are out of control and lack any coherent structure. It is no wonder that the Government have set a new target. They said:
	"We will work . . . to reduce the number of business support services from around 3,000 now, to no more than 100 by 2010."—[Official Report, 27 March 2006; Vol. 444, c. 642W.]
	The difference between 3,000 and 100 is so massive that it makes one wonder why the Government have not done something about it earlier.
	Business likes a stable framework in which it can invest. It does not like erratic public policy. We have had the saga of the operating and financial review and, as the hon. Member for Kingston and Surbiton (Mr. Davey) pointed out, we now have the saga of laptops.
	During the Parliament, Qinetiq and Westinghouse have been sold. However, we have not had any clear statement of the Government's policy on privatisation and the sale of assets. At least—one might also say, "at last"—the Chancellor has said something in the Budget about his future intentions. If he is to dispose of £30 billion of assets before 2010, I hope that he will at least make some shares available to the general public and not treat them, as his special adviser does, as old grannies in blouses to be contemptuously dismissed as irrelevant to wider share ownership.
	The Secretary of State referred to the energy review. Almost all the Government's existing policy objectives have not been fulfilled. Today, we have had the climate change programme review, which shows that we are missing our emissions targets. A second objective was to seek reliability in energy supplies, yet we have recently experienced a gas balancing alert and punitive gas prices. A third objective was to eliminate fuel poverty, but the Government estimate that the number of vulnerable households in fuel poverty is due to rise by 1 million. And the climate change levy is a tax on energy, but we need to bear down on emissions. We are taking the energy review seriously, but it seems as though the Prime Minister is semi-detached from his own.
	The Chancellor hardly dared to mention pensioners in the Budget. That was hardly surprising, given that what he has not already destroyed, he cannot now afford. At a time when the hard-pressed private sector is carrying an ever-growing public sector, this Secretary of State did a deal. He caved in to the unions over central Government pensions and has thereby enraged those who work in local government. Those in the private sector are working longer and have less pension security, and today we have seen the biggest strike since 1926. One estimate puts the total liabilities in unfunded public sector pensions at nearly £1 trillion. Is the Secretary of State still prepared to claim that he is the Minister responsible for public pensions?

Alan Milburn: I refer the House to my entry in the Register of Members' Interests.
	It is always a huge pleasure to follow the hon. Member for Rutland and Melton (Mr. Duncan), although his speech was somewhat less dispassionate than he had promised. He was obviously in Tiggerish mood, and somewhat less gracious than usual. I would have thought that any right hon. or hon. Member would recognise that to be able to deliver 10 Budgets in a row is a pretty remarkable achievement on the part of any Chancellor of the Exchequer. For those Budgets to have coincided with, and contributed to, our remarkably successful economic climate is without parallel in modern times. So perhaps the shadow Chancellor, the hon. Member for Tatton (Mr. Osborne) will offer a bit less criticism and a bit more credit to my right hon. Friend when he rises to speak later.
	The test of whether a modern Budget works consists of three things. First, we must determine whether it provides for sound economic management. Here, my right hon. Friend has again confounded the prophets of doom, including many Conservative Members, who seem to take perverse pleasure in predicting the imminent decline either of the British economy or of the public finances. I have heard much the same speech from the Conservative Front Bench over the past nine years. In the real world, however, I have yet to see any such decline. Who nowadays talks of mass unemployment, sky-high interest rates or out-of-control inflation?
	It is true that Britain faces many challenges in the future, and I will come to some of them in a moment. However, credit is due to my right hon. Friend the Chancellor. As the International Monetary Fund put it in December,
	"macro-economic stability in the UK remains remarkable."
	When the shadow Chancellor gets to his feet later today, I hope that he will have the good sense and good grace to concur with that judgment.
	Secondly, however, successful Budgets must look beyond today's achievements and face tomorrow's challenges. In the end, politics is about the future, not the past. Political parties that are wedded to the past tend to remain stuck in it, which is precisely why the Conservatives remain in opposition. Success goes to those who have the strongest claim on the future. Again, in that regard, this Budget has much to commend it—above all, as my right hon. Friend the Secretary of State for Trade and Industry has just said, its commitment to increased funding of education and science as recognition that our country's future competitiveness will rely increasingly on access to skills and technology.
	That brings me to the third test of success for any Budget—whether it works politically as well as economically. Here, my right hon. Friend the Chancellor laid down a dividing line in his Budget that caused the Conservative party—I notice that the shadow Chief Secretary has departed—some discomfort, to put it politely. The Conservatives' adoption of a third fiscal rule might have seemed a good wheeze when it was dreamt up, but the Budget has exposed it for what it is. Going into the next election promising cuts in public expenditure, particularly in education, will leave the Conservative party no further forward than it has been at the two previous elections.
	I speak with some feeling on that. My party had to learn the hard way during the 1980s that when one gets the fundamentals of tax and spend wrong, one pays a very high political price. Conservative Members might note that former President Clinton is in town today, and we all welcome him. The Conservative party would do well to heed the advice of President Clinton's famous election campaign slogan—it is the economy, stupid, not stupid economics, that wins elections.
	When Labour won office a decade ago, the key policy question that faced Britain was how to end the stop-go economic cycle and how to modernise public services. In both regards, although, of course, there is more to do, there is much progress to report. There are new questions today, however, which are different from the old ones. They boil down to this: how can we ensure that our response to globalisation, including increased competitive pressure from India and China, is characterised by the building of a genuinely inclusive society when there are huge pressures going in the opposite direction?
	As my right hon. Friend the Secretary of State for Trade and Industry indicated in his speech, globalisation demands many policy responses from Government—fiscal discipline, economic stability, open markets not economic protectionism, a limit on regulation. It also requires investment in skills, technology and infrastructure. In the end, however, important though each of those policies are, the most important policy response is none of those—instead, it is the building of a society in which every citizen gets the chance to contribute and to progress. We now live in a highly competitive world, in which every talent wasted is not just a loss to the individual but a huge economic drag on the country. Britain can succeed economically only if we are mobile socially. Here, bluntly, we have no reason for complacency and much to concern us.
	As my right hon. Friend the Chancellor reported, it is true that life is steadily getting better for most people—living standards are rising. We all know, however, that in recent decades birth not worth has become more and more a key determinant of life chances in our country. Social mobility has slowed down when it ought to have been speeding up.

Alan Milburn: I will come to precisely that. The hon. Gentleman might have read, I think, the most authoritative study on inequality, mobility and poverty by Professor Hills of the London School of Economics. He says that it is likely that in the last two years for which figures are available, the widening of the inequality gap, which widened massively during the 1980s, has been halted. What we know for sure is that poverty has been reduced, particularly among children and pensioners. The truth is, however—we see it in the hon. Gentleman's constituency as much as in mine—that the gap remains stubbornly and persistently wide. While more people are better off, poverty has become more entrenched. There is a glass ceiling on opportunity in our country. We have raised it, but we have not yet broken through it.
	There are many welcome measures in the Budget that will help the position. Increasing the value of tax credits is one; yesterday's White Paper, with its focus on skills, is another. But as Amartya Sen, winner of the Nobel prize for economics, has noted, social inequality is best tackled and mobility best advanced if we tackle the root causes, not the symptoms. That must mean moving beyond simply correcting low wages and family poverty after the event, towards policies that spread opportunity and help people to realise their own aspirations for progress.
	The biggest inequity today in our country is not between income groups, but between those who own shares, pensions and housing and those who rely purely on wages and benefits. That is why I believe, in common with my right hon. Friend the Chancellor, that the biggest contribution to enhancing social mobility is to establish Britain as an asset-owning democracy. After all, people rarely spend their way out of poverty. It is far better to encourage people to own assets, so that they have a real stake in the future. I therefore welcome the Budget announcement about the child trust fund. I also welcome the extension of home ownership: indeed, I want it to go further. Just as we are extending home ownership, we should seek to extend employee share ownership to give people a greater stake in economic success.
	My party won by becoming a party of aspiration. Our means of beating poverty should involve unleashing aspiration. That brings me to another area in which more reform is needed to combine the values that the Labour party, at least, has always supported—social justice and fairness for all—with the modern ambition that people rightly have to progress. I refer to the sensitive issue of taxation.
	The Chancellor told the House that he had had scope for tax cuts, but had chosen not to make them. He rightly announced, however, that he was uprating tax credits in line with earnings. In effect he was announcing a tax subsidy for working households, and I welcome that. Tax credits have made a real difference in raising living standards and incentivising people into work. Before their introduction, thousands of low-income families faced marginal tax rates in excess of 70 per cent. Some were even clobbered by rates of over 100 per cent. That meant that for every £1 earned in wages, more than £1 was taken off in tax.
	Today, over half a million fewer low-income households face such insanely high marginal tax rates than was the case in 1997. However, as the Red Book itself confirms, the number facing marginal tax rates of 60 per cent. or more has increased by nearly 1 million, largely as a consequence of the workings of the tax credit system. The Institute for Fiscal Studies has warned that without remedial action, that could worsen work incentives.
	I was brought up to believe that hard work and endeavour would be rewarded, not penalised. The tax system needs to reflect those values. On fairness grounds, it surely cannot be right for people towards the bottom of the income scale to face higher marginal taxes than those at the top. It is for that reason that I welcome the Chancellor's plan for a review of the feasibility of aligning income tax and national insurance contributions for low-income families. I believe that the review should consider additional ways of making direct, targeted cuts in the tax burden on low-income families, building on our introduction of the 10p starting rate of tax in 1999, so that we can spring more people from the poverty trap. Such radical action is needed if we are to unfreeze social mobility in our country.
	Of course there is much that this Labour Government have already done of which we can be proud. No Conservative Government would ever have introduced a national minimum wage, made universal child care a new arm of the welfare state, or helped millions of pensioners out of poverty. The Budget is a further step in the right direction, but we need to do more to help more people through that glass ceiling. An 80–20 society, in which 80 per cent. do OK but 20 per cent. are left behind, might be good enough for the Conservatives, but it should not be good enough for us. That is why I urge my right hon. and hon. Friends to keep moving forward with reform. The longer we are in government, the greater the need to keep on changing to keep pace with the times in which we live.

Vincent Cable: It is, because as my hon. Friend implies, the pilot schemes have been run already and have proved highly effective, but what had been promised was a universal scheme, which now seems to be in the process of being abandoned.
	I congratulate the Conservative spokesman, the hon. Member for Rutland and Melton (Mr. Duncan), on his emollient and consensual approach—at least, he started like that. He is someone who describes himself, like some of his colleagues, as a fellow liberal. I am not sure how far up the Back Benches that view is to be found, but it is a good start, and perhaps we saw a new style of debate today, which has been characterised by one wag as the debate between new Labour and blue Labour, although I do not know how the hon. Gentleman positions himself.
	The overall Budget debate has been somewhat frustrating, because we are essentially dealing with two different issues, one of which is the Government's overall economic performance and the other is the Budget, which has become a somewhat ritualised event. Most of the decisions have been made in the spending review and the pre-Budget report. The sum total of what is proposed amounts to 45 measures, costing £380 million. That is less than one tenth of 1 per cent. of all Government spending—well within the margin of error of any Government forecast. We are talking about a series of changes—some of which are very welcome and sensible, such as the spending on schools and science—that have absolutely no impact whatever on the overall macro-economy.
	On the macro-economic picture, the view that I have taken ever since I took on my current role is to acknowledge the positives, and it is certainly still true that we have steady growth, low inflation, rising employment and fairly low unemployment, although unemployment has now risen for 12 of the past 13 months, which may be the beginning of an ominous trend. However, the Government tend to spoil their own very positive narrative with endless spin, hype and exaggeration. One little phrase always creeps into the Budget statement that reveals a lot: it is a lovely line about how they have the best period of steady growth, going back to 1700, or the Tudors—or the Normans, I am not sure. That nice line is true in one sense, but it is produced by a sleight of hand, by using quarterly data.
	If we use annual data, we could argue that, after 1949, for example, there were 25 years of steady growth. It is worth reflecting back on that period, because many of the strengths and weaknesses of the current long boom were apparent then. As some of us dimly remember from our childhood, it was a period of steady growth and rising living standards. Many of our parents were for the first time enjoying consumer durables bought on hire purchase. It was also a period of low unemployment, low inflation and general optimism; however, there was a fundamental problem that we see reproduced today.
	Back then, the structure of the economy and of demand was very unbalanced—it was led by consumption. Of course, in those days such imbalance appeared in the form of crises, because consumption spread over into imports and produced balance of payments crises. That no longer happens because of the liberalisation of capital markets; nevertheless, we have the same problem today. Consumption has grown by 3 to 3.4 per cent. a year since the mid-1990s, while the economy as a whole has grown by about 2.8 per cent. As a result, household savings ratios have fallen from 10 per cent. to less than 5 per cent., and the end product is a growing problem of personal debt. The Minister will have seen this morning's report from the Financial Services Authority—a very conservative regulatory body not given to hype or outrage—which points out that some 2 million families, over and above the 500,000 who have already defaulted on debt, are on the edge and in considerable difficulties in terms of managing domestic debt problems.
	Figures published by the Organisation for Economic Co-operation and Development a few weeks ago point out that the comfort that we derive from low interest rates is illusory. Because of low interest rates, people are borrowing very heavily, which means that principal repayments are growing much more than they did in earlier generations. People are also taking on credit card debt, which has to be serviced monthly. The OECD concluded that the share of household income being spent on debt servicing is approaching 20 per cent. The same was true in the early 1990s, when the last economic boom crashed disastrously under the previous Conservative Government. In many respects, the conditions today are very similar, and we can expect a painful correction in the years to come.
	The other parallel with that period is also very striking. Throughout the 1950s and certainly in the 1960s, as we moved into the Wilson era, politicians talked endlessly about productivity growth and science, because in comparative terms there was an underlying weakness in the UK economy. That weakness was very apparent, because Germany, Italy, France and Japan were recovering from the wartime period. It is less apparent now because the real breakthroughs are occurring in non-G7 countries, but the problems are still very real.
	As quite a few economic analysts have pointed out, in the past few years the British economy's productivity growth has fallen. A report published this morning by the Economist Intelligence Unit shows, for example, that Britain is now the seventh biggest recipient of inward foreign investment; last year, it was the fourth biggest. That is very strange and difficult to explain. Britain has a very open economy—unlike France, Italy and Spain, we have no problem with foreign acquisitions and mergers—yet foreign investors are very reluctant to come here. According to the EIU's analysis, a combination of very complex business taxation—incidentally, the corporation tax threshold was not raised this year, so more companies have been dragged into the higher rates—regulation and poor infrastructure is having a cumulatively damaging effect on the Chancellor's claim that he is overcoming problems of low productivity.
	On the Budget's specifics, one has to judge them on whether the Government are meeting their declared fiscal objectives in terms of the golden rule and the debt rule, and the Government themselves say that they are. Sadly, although the fiscal rules were a good idea and a very good way of restoring confidence in public finances, they have been discredited by the Government's marking their own exam papers in a favourable way. I acknowledge that the Government propose to take the big and positive step of introducing legislation to make the Office for National Statistics more independent, but there is another part to all this that is not happening. There should be a much greater degree of independence in the auditing of the Government's own accounts. An independent examination should be made of their assumptions and forecasts, and of whether they have actually met their rules. That would be a small step, but it would do an enormous amount for Government credibility so I cannot understand why they do not take it.
	Because the Government have not taken that step, many little details in the Red Book raise suspicions about what they are trying to do; for example, in 2007–08 and beyond there is no contingency fund in public spending. The contingency fund was extremely important for funding the Iraq war, but it now appears to have disappeared, which implies a highly optimistic approach to future budgeting. Perhaps the Chief Secretary can explain what has happened.
	There are some optimistic assumptions about the clampdown on tax avoidance. I am all in favour of tougher measures to clamp down on tax avoidance and I wish the Government well in their efforts, but they assume that they will achieve a 100 per cent. success rate and raise an extra £1 billion a year from those measures. Have the proposals been independently audited? Has anyone in the tax industry been able to confirm that the figures are meaningful and sensible?
	Items on the spending side need to be questioned, too. During his Budget statement, the Chancellor said that an additional £970 million would be spent on public housing through shared ownership schemes, which at the time I thought was positive and encouraging. However, although I and other people have searched through the Red Book, there is no reference to that sum anywhere. Shared ownership is difficult to operate, but it appears that the figure simply reflects commitments made last year and the year before, so it is not a new commitment at all. Can the Government confirm that?
	Various other spending items need some explanation. Perhaps the Chief Secretary can advance it. For example, it is stated there will be a 5 per cent. real cut in the spending of the Treasury, the Cabinet Office and the Department for Work and Pensions. I am all in favour of tightening up discipline in spending Departments, especially if they can reduce headquarters overheads—the principle is splendid. However, when Gershon reported just over a year ago, he argued that any cuts beyond 2 per cent. a year would be likely to result in a deterioration of service provision. How do the Government square that with their proposals?
	We already know from our constituents who are grappling with the problems of Jobcentre Plus that when they are put out of work it can take weeks to receive an answer to a call or to regularise their payments. There are already serious problems in the DWP. We know from National Audit Office reports that the Inland Revenue is falling short in its revenue collections by about £3 billion a year because it cannot get codings right. How taking out large swathes of capacity in that department will help is not clear. Where will the real savings of 5 per cent. come from?
	I have questions about the £30 billion that the Government plan to raise from privatisation, or asset sales. I have no problem with the principle, but the Government have already experienced considerable difficulty in realising maximum value for the public from asset sales. I closely followed the Qinetiq deal, where clumsy intervention by the Treasury, pushing the Ministry of Defence into selling the assets prematurely, resulted in the taxpayer receiving only a fraction of what should have been achieved by the sale. One has to be a bit sceptical about whether those sums will be realised.
	What guarantees will underpin asset sales? One of the biggest sales will be shares in British Energy. In principle, there is no reason why there should not be a private shareholding in the company, but if I were buying a share in British Energy I should want to know about its long-term business. The only way that can be secured is if the company is guaranteed an expanding new nuclear power programme. It is difficult to see how privatisation can proceed without the kind of guarantee about which the Government claim to have an open mind. There is clearly a link between the two.
	I have some specific questions about tax measures, one of which has been touched on by my hon. Friend the Member for Kingston and Surbiton (Mr. Davey) and relates to the strange events surrounding the tax concession on work-based laptop computers. I quote to the Chief Secretary what his colleague the Chancellor said in 1999, when the measure was introduced. He said:
	"We hope this new measure will encourage businesses to loan computers to their employees and that it will be as successful as a similar scheme developed in Sweden, where household computer use increased dramatically as a result. There are real benefits to businesses, employees and the wider community."
	Well, why has the measure been pulled? As I understand it, it was pulled at about 24 hours' notice, following warnings from the Revenue about the difficulties. What has happened? Why was there no consultation?
	I have just had an angry e-mail from one of my constituents who runs a business in that sector. He writes:
	"As a business we have spent months working with other suppliers to set up processes, systems and contracts to help businesses finance this scheme. In fact we had just embarked on a scheme to provide finance for small to medium sized businesses so they would be able to let their employees take advantage of the scheme."
	That has been completely undermined by the lack of consultation and by peremptory announcements.
	Unfortunately, that follows a pattern. Last year, we had the self-invested personal pensions scheme. Partly as a result of warnings from Liberal Democrat Members, it was clear that the Government were opening the door to all kinds of problems related to giving tax relief on second homes and luxury holiday homes overseas. They had to retreat and did so in an embarrassing way, when people had already invested in the arrangements.

Tom Clarke: Since 1997 the Government's objective has been to build a strong economy and a fairer society with opportunity and security for all. That has been the backdrop of every single Budget that the Chancellor has delivered, including last Wednesday's. I have heard all of them, and before the hon. Member for Rutland and Melton (Mr. Duncan) leaves the Chamber, may I also say that I heard a number of Conservative Budgets before them? The hon. Gentleman seemed to suggest that there is little difference in the mind of the public, but that is not the perception of my constituents. They recall this Chancellor's contribution and contrast that with Black Wednesday, which, the Treasury estimated, cost £3.3 billion. The then Chancellor, Norman Lamont, raised interest rates during the day from 10 per cent. to 12 per cent. and then to 15 per cent., and authorised the spending of billions in an effort to keep the pound in the range allowed by the exchange rate mechanism. I am not complaining about the hon. Member for Rutland and Melton leaving the Chamber; I am sure that he will read my speech as carefully as I listened to his.
	I want to be positive today and highlight the benefits to the economy and my constituents of the past nine years and the measures in the Budget. Inflation is set to remain low and stable. We are entering the 10th year of real growth under this Government, who are the only Government in British history to be on course to maintain 10 consecutive years of uninterrupted economic growth.
	The economy has generated 2.3 million additional jobs since 1997. Britain has 75 per cent. of adults in work—a higher rate than those in America and the euro area. There are 170,000 more people in work than a year ago. In Coatbridge, Chryston and Bellshill the number of people out of work is 1,738, and 38,100 people are in work. What a remarkable transformation of employment opportunities! We could only dream of such figures during the years of the Conservative Government. However, even unemployment statistics can mask the personal misery endured by families torn apart and left with no dignity or future, as we saw when unemployment continued in an upward spiral and grew substantially in the '80s. Unemployment has been tackled most successfully, and the Government are now addressing the issue of incapacity benefit claimants.
	My constituency is ranked No. 10 in the list of those claiming the most incapacity benefit. The top locations include Lanarkshire and Liverpool, and six of them stretch across south Wales. That should come as no surprise, because those were the heartlands of heavy industry, employing miners, steelworkers, shipbuilders and foundry workers—all doing heavy, dirty and often dangerous employment. In the case of the mineworkers, the Government have almost completed the largest personal injury compensation scheme in the world, yielding £1.8 billion for respiratory disease and £1.2 billion for vibration white finger.
	However, the Department for Work and Pensions pathways to work project needs to be sensitive to that historical background and the enormous contribution that many workers from those communities have made to the wealth-creating industries. On Monday 10 October 2005, the Secretary of State for Work and Pensions published the Department's principles of welfare reform, which contain the values and principles that shape the Government's vision of the future welfare state. There can be no quarrel with that considered approach, provided that the principles are maintained and advisers treat incapacity benefit claimants with respect and dignity. It is also crucial to provide skills. A high-skill economy will help to deliver faster productivity and growth, and ensure that the UK is well placed to prosper in the global economy. That is our response to globalisation.
	The national minimum wage is an important cornerstone of Government strategy, aimed at providing employees with decent minimum standards and fairness in the workplace. Decency and dignity for all employees has replaced the old Dutch auction of employers competing against each other on the basis of who can pay the least to the fewest, which has no place in a fairer, modern Britain. The wealth we were promised in those days never did trickle down, but now we have the Low Pay Commission recommendations in place for the adult rate of the national minimum wage to rise to £5.35p from October 2006. I welcome that.
	On health, the NHS budget has doubled since 1997, and will have almost trebled by 2008. The Red Book refers to admirable progress in accident and emergency units. Governments have their responsibilities; so do health authorities. Monklands accident and emergency unit, which serves my constituents, is earmarked for closure. I wholeheartedly support the retention of that vital health service facility. I congratulate my local newspaper, the Airdrie and Coatbridge Advertiser, on its outstanding role in promoting the retention of that unit. Praise is also due to the Kirkintilloch Herald, which has established a reputation second to none for campaigning on health issues. None the less, they also recognise the unprecedented investment in health made by the Chancellor.
	The pretentious fury about the Chancellor's speech exhibited by the Conservative Front Bench team was about playing the man, not the ball. The Chancellor's consistent support of the national health service simply proves that actions speak louder than words. The administrators responsible for the provision of our health service have a difficult job—but heavens, how much more money do they want to provide the range of services that we need? The Chancellor has responded, so it is their responsibility to act. [Interruption.] I told the hon. Member for Rutland and Melton that he would enjoy what I said, and I am sorry that the hon. Member for Rayleigh (Mr. Francois), too, will only have the pleasure of reading my speech.
	Trusts should be able to live within their budget allocation, and they should accept that priorities are just as important to patients as they are to consultants.

Kenneth Clarke: I draw the attention of the House to my entry in the Register of Members' Interests.
	I have not missed many Budgets, if any, since I entered the House, and I have never heard a Budget that had less content than the Budget that was delivered last week. It has already vanished from the newspapers, it contained very few measures, and it did not seem to attract the attention of the Chancellor of the Exchequer very much. He is plainly bored by the job that he holds, which he has held for a long time. He is impatient, we all know, to go to another.
	The Chancellor can be a considerable and effective parliamentary debater, but I have never heard him put less effort into delivering a speech, so he gave a very boring speech. As the hon. Member for Twickenham (Dr. Cable) remarked, searching through it for what we used to regard as Budget measures produces a thin harvest. The Chancellor could not afford to do anything in the Budget, and did not particularly wish to do anything, so there was very little in it.
	I am one of those who believe that we need an annual Budget. It is a strange performance that we go through, but the House debates economic policy so infrequently on the Floor that it is valuable to have a five-day annual debate. I do not want to go back to Budget speeches that used to be long, impenetrable, detailed expositions of fiscal and monetary measures, macro-economic indicators and the outlook for the economy, but we need more fact than the political presentation that we get from the Chancellor, and from his colleagues in subsequent days.
	It would be nice to have a statement of fiscal policy, a description of all the fiscal measures being introduced that day, including the ones in the press releases, and a more dispassionate outlook as to where the economy is going. Because many of the financial commentators in the newspapers just take the Treasury briefing, if we have a Budget of the kind delivered by the Chancellor last week, we often have a debate about economic policy in the United Kingdom that is not based on a sound factual footing.
	I shall try to fill the gap. I have spent a few days trying to work out where we are and what the Chancellor is doing. He deliberately took content out of the Budget by moving the difficult things out. Let me begin with fiscal policy. The Chancellor is raising taxation rapidly and increasing the tax burden, which is going up to levels that we have not seen since the 1980s. He is preparing to restrain spending growth drastically; he just did not want to say so in his Budget statement.
	The Chancellor got rid of the specific tax measures in the pre-Budget November statement. He got over the humiliation of finally admitting that his growth forecasts were all wrong, but more importantly, he imposed yet more tax burdens on the oil industry, which will raise £2 billion in a full year, and he floated the idea of a development land tax, about which we will no doubt hear more in due course.
	In the Budget, the Chancellor has relied on his old weapon of fiscal drag—not raising the thresholds for each level of tax in line with inflation, so as to produce more and more income. That leaves all our constituents baffled about why they feel they are paying more tax, although the Chancellor has not announced any increase in taxation. All Chancellors use it; the present Chancellor uses it every year, and he is using it heavily. The Red Book forecasts that by 2010, compared with the present, another 1 per cent. of national gross domestic product will be taken by income tax and national insurance.
	As has already been pointed out, corporation tax thresholds have not been raised at all—not in line with inflation, not at all—so corporation tax take increases as well. The Chancellor is raising his revenue rapidly. He needs to; I shall return to that. He has put off—I do not regret it—the comprehensive spending review a little. I do not know why. It will be completed by mid-2007. He gave us hints of the beginning of that with what has already been described for Her Majesty's Revenue and Customs, the Treasury, the Department of Work and Pensions and the Cabinet Office. Their baseline will be taken down by 5 per cent. per annum in real terms, compared with their baseline for 2007–08. I imagine that the Ministers responsible will think of nothing else, because we have been given no idea how it will be achieved.
	The Chancellor forecasts that public spending as a whole will increase by 1.9 per cent. each year between 2008 and 2010, which is less than half the level of recent growth and less than the likely growth rate of the economy. We have no idea where those cuts will be made, and we have no idea how the public services will cope when some of them are in crisis even following the ridiculous largesse since 2000. Unless reform is initiated, this will be a tight public spending round.

Kenneth Clarke: I realise that spending is not usually a matter for the Budget, although I used to include it. However, when one considers fiscal policy, spending is still relevant to the debate. The Government are raising tax and are about to cut spending growth drastically—they argued that we were being draconian when we urged such measures in the past. There are no longer any fiscal rules by which to judge the matter. The golden rule has been discredited since the ridiculous change to the timetable for the cycle. The sustainable investment rule would be sensible, if the accounting devices for Network Rail, unfunded pension commitments and the private finance initiative made any sense. The Chancellor is flying by the seat of his pants on fiscal rules. In its annual country report, the International Monetary Fund recommends that he should start putting in some fresh fiscal rules to correct those discrepancies.
	Although the Budget does not contain a Budget judgment, we should know what it is. Chancellors usually loosen policy, tighten policy, try to redress the public finances or feel that they can be expansive. This Chancellor is tightening policy, and he has only just started. He must do so because of many factors that we warned him about, given his years of irresponsibility since 2000.
	The real economy is in the doldrums at the moment. Let us not start the fancy swapping of statistics, which involves real-terms figures, cash figures and choosing particular funny years. Everybody knows that the economy is going through a period of marked slowdown, because the 1.8 per cent. gross domestic product growth in 2005 was the lowest since 1992. Why is GDP growth slowing down? It has been based—I refer hon. Members to my previous Budget speeches—on a sea of household debt, and public debt and borrowing, for the past six years. That was not sustainable, and what is not sustainable always stops, which is why GDP growth has started to slow down. There has been a drop in consumer demand and a drop in public investment and spending. Those trends will continue, and will not pick up rapidly.
	Last year consumer demand grew by 1.9 per cent.—the lowest growth since 1995. It will not pick up, and I shall briefly explain why. First, household debt is about 150 per cent. of household incomes. People will not add much to absolute debt, so they are not going to spend above their incomes any more. The disposable income of the average household in this country has gone up by only 1 per cent. in each of the past two years. Furthermore, I have referred to the tax burden, and the Governor of the Bank of England mentioned it when he discussed falling demand.
	We have rising unemployment—there has been a slight hiccup in unemployment, which has been a good field hitherto—and last month's increase in the claimant count was the biggest since 1992. I am most struck by the fact that next year the percentage of the working age population in employment in this country will be lower than that in the German Democratic Republic. People are more insecure about their jobs than they used to be.
	The pensions crisis is making people worried, which will cause the savings ratio to increase, and consumer demand will not come back. When one examines the Chancellor's proposals and considers what the Chief Secretary must do in the public spending round, it is clear that public investment is not going to carry on providing all the growth in the economy in future years.
	The economy is slowing down markedly, and I cannot see any reason why it should bounce back in a hurry. I think that we could be in for several years of lacklustre performance, and I think that we have got there because the Government took too short-term a view and disregarded the warnings when the Chancellor went in for tax and spend. Since 2000, the Chancellor has made the economy ever more dependent on shoving in demand, either by encouraging consumers to borrow too heavily or having the Government spend too highly. Now, the economy will slow down. I have not even touched on global influences such as oil prices and commodity prices, which still have not had their full effect on our growth potential. There will be no quick bounce back.
	I have described where I think that we are, so what are my conclusions? The Chancellor has done nothing of significance in the Budget, except to announce small measures and drift on in the manner that he has already proposed. I would like us to seek to achieve so much more. What economic policy now lacks is ambition. It has become fashionable to talk about the challenge from India and China, and one can add to that Brazil and the entirety of south-east Asia. Globalisation is transforming the world in which we are competing, and the pace of technological change has never been faster, so we must be much more competitive than we ever were.
	To make our economic growth sustainable, we need to rebalance it. We will need some years in which growth is led not by consumer demand and public spending, but by investment, trade and productivity, and we must do things to encourage that.

Kerry McCarthy: It is slightly daunting to follow a former Chancellor of the Exchequer in a Budget debate. I spent the morning at the Treasury Committee taking evidence from the Governor of the Bank of England. I must say that the Governor's analysis of the current economic outlook bears very little relationship to the scenario just presented by the right hon. and learned Member for Rushcliffe (Mr. Clarke).
	I welcome the Budget's focus on the economic performance of cities as a driver of regional economic growth, especially the importance placed by my right hon. Friends the Chancellor and the Secretary of State for Trade and Industry on science and the creative industries, which are certainly key to the economic prosperity of Bristol and the surrounding city region. Bristol has been designated one of the first six science cities in the UK and the universities are leading the field in several areas of scientific research. The city is also host to many creative entrepreneurs, especially Aardman Productions, which has just brought back its fourth Oscar from Hollywood.
	I wish to talk today about the need to raise levels of enterprise and investment in our most deprived areas if we are to raise overall levels of enterprise and productivity. We know that significant amounts of regeneration funding have gone into those areas, but that alone—welcome though it is—will not deliver fundamental and lasting change: creating thriving and successful business sectors in those communities will.
	The Government have introduced a range of initiatives over the years, including enterprise areas, business improvement districts, new entrepreneur scholarships, the Phoenix fund and the business incubation fund. I could go on. I was pleased to see continued support in the Budget for measures such as the local enterprise growth initiative. So far, £126 million has gone into deprived areas and a second bidding round will start soon. I hope that one day my constituency will benefit from that.
	Government support is not, in itself, enough. We need a long-term transformation in the business environment in poorer communities, and to achieve that the private sector has to play a part. The Budget included a very useful paper entitled "Financial services in London", which I read with great interest. It rightly focused on the City's internationalism—it was sub-titled "Global opportunities and challenges"—which is, after all, the reason for its past pre-eminence and its continued success and prosperity. However, we also need to look at whether UK financial institutions could do more to help regeneration in our poorest areas.
	When the Treasury Committee went to the USA recently—a country with higher productivity than the UK and a much stronger enterprise culture—we visited City First bank in Washington DC, which is a community development financial institution, or CDFI, that serves a community that is 87 per cent. black and 9 per cent. Hispanic. The bank is playing a key role at the heart of its community in cultivating a crop of new entrepreneurs and business that are rooted in their communities, bringing new wealth into them.
	The bank's clients also include many customers in the not-for-profit sector, who were not well served by major banks, including day-care centres, homeless shelters, sheltered housing operators, churches and charter schools. Those depositors know that by putting their reserves into City First, at a competitive rate, they are also having a positive impact on the local community. The team at City First act not just as bankers, but as business advisers, working with clients on, for example, drawing up cash-flow projections. They nurture their clients, through good times and bad, and they can do so because they are part-funded by mainstream banks. The mainstream banks benefit from the new markets tax credit, and also meet their obligations under the Community Reinvestment Act—I shall return to that later.
	There are, of course, significant differences between the UK and the US banking systems, but we can learn lessons from the US. A vibrant CDFI sector in the UK could help to fill the funding gap that is left by a lack of access to mainstream finance and could act as a bridge between deprived communities and the more successful mainstream economies. It could also improve the sustainability of regeneration funding through increased loan financing, as compared to grant funding.
	There has already been some analysis of the need for such organisations in the UK. Bristol city council commissioned some research in 2002 that looked at the support available for local business start-ups. In particular, it looked at Barton Hill, an estate in my constituency that is in a ward ranked 133rd on the national index of deprivation. The estate benefits already from £50 million regeneration funding under the new deal for communities scheme, but that alone is not enough to turn round its fortunes.
	The study found that there was no lack of agencies providing enterprise support in Bristol. In fact, there was an over-provision of agencies and an under-utilisation of funds. In some cases, the resources were overlapping, or poorly targeted, or the agencies did not fully understand or meet the needs of micro-entrepreneurs. I very much welcome the decision, highlighted by my right hon. Friend the Secretary of State for Trade and Industry today, to cut the number of business support services from 3,000 to 100 by 2010. Streamlining the support will make accessing it much easier for small businesses.
	The Bristol study noted that there was a raft of community finance initiatives, such as a loan guarantee scheme provided in partnership with a mainstream financial institution. But application processes were complex, and they had not been drawn together or developed in the context of an integrated strategy. The study also found that barriers to personal finance, such as the lack of a bank account or the absence of any savings or assets, were also significant barriers to entrepreneurship. We know, however, that mainstream financial institutions are increasingly deserting such communities, to the extent that they no longer even provide cashpoint machines, let alone set up branches.
	The Bristol study recommended the creation of a broad-based CDFI, which would bring together existing loan funds; encourage closer partnerships with, and between, credit unions; link in advice services, such as the excellent Bristol Debt Advice Centre in my constituency; and bridge the gap between access to personal banking facilities and enterprise finance. A CDFI in Bristol could also, as in the United States, have a role to play in supporting voluntary sector and not-for-profit groups, of which there are many in my constituency, doing immensely valuable work. They all too often struggle to access funding, can secure only short-term funds, or are hit by cash flow problems as they get caught out by the complexities of endless bidding rounds. A community bank could help them negotiate their way through the maze, by providing loan finance, cash-flowing shortfalls and offering business advice and support.
	The Government have already taken some important steps to promote the development of CDFIs in the UK. They have established a trade association for CDFIs—the Community Development Finance Association—and the Bridges community development venture fund has invested £20 million in our most deprived areas. Most importantly, the Government have introduced the community investment tax credit, which gives a tax incentive to investors in accredited CDFIs, and requires them to make onward investments. So far, that has enabled CDFIs to raise some £35 million of new capital for onward lending to small businesses and social enterprises in disadvantaged communities. CDFIs have financed more than 9,500 businesses and individuals, sustained more than 85,000 jobs, created more than 10,000 jobs and leveraged another £160 million in additional funds, on top of the £400 million they already have available to lend and invest.
	That represents real progress, but there is still a long way to go before the sector is as vibrant and as much a part of the local economy as it is in the USA. There are three possible ways to encourage our financial institutions to do more to lend and invest in disadvantaged areas, and to support the development of CDFIs. The first is to offer a reward or incentive for investment, through measures like the community investment tax credit, which the Government have already done. The second, which was recommended by the social investment task force in 2000 but has not yet been implemented, is to force disclosure by the banks of the extent of their investment in, and provision of services to, disadvantaged communities. Only one bank, Barclays, does that voluntarily, and I suggest that the time has come to encourage—or perhaps do more than encourage—other banks to follow suit. The third and more radical approach would be to adopt the US approach, and legislate to require banks to invest in deprived communities. In the USA, under the Community Reinvestment Act of 1977, deposit-taking financial institutions can choose whether to provide banking services directly to under-served communities, or to invest in CDFIs that do, but they have to do one or the other. That activity is monitored by federal regulators, and taken into account when banks are applying for charters, or for approval of bank mergers, acquisitions and branch openings. At the last audit, only 5 per cent. of banks were judged to have failed to comply with their obligations under the CRA, which has led to a huge growth in the CDFI industry and greatly increased access to capital for low-income communities. The bank that we visited in Washington said that without that legislation they would not exist, and neither would the businesses set up for their customers.
	I spoke earlier of the company based in the Barton Hill area of my constituency that has just returned from the Oscars. Who knows what other talent is out there that, if cultivated, nurtured and supported, and if given half a chance and helped by financial institutions, would go on to similar success?
	In conclusion, I very much welcome the measures proposed by the Chancellor in his Budget, particularly the focus on support for enterprise investment, and I hope that we can build on those measures for years to come.

George Young: Yes, indeed. There is one minor modification, which I shall come to in a moment, involving a tax that the Chancellor introduced relatively recently and has just abolished in haste.
	I agree with those who say that if one considers the conventional economic indicators—growth, inflation, numbers of unemployed—one gets the impression of a benign economy. But I also agree with those like my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) and the hon. Member for Twickenham (Dr. Cable), who say that if one looks behind that, there are some worrying signs. For example, much of the current growth is funded by either private borrowing or high public spending, neither of which is sustainable in the longer term. One would have hoped for measures in the Budget to replace those engines of growth with other more sustainable ones, promoting an export-led recovery, private sector investment and an increase in private disposable incomes through productivity. When the hon. Member for Twickenham spoke about an adjustment in a few years' time, when the current engines of growth prove to be unsustainable, he put his finger on one of the more worrying long-term trends in the economy, which, in my view, the Budget did not address adequately.
	I agree with the comment of my hon. Friend the Member for Rutland and Melton (Mr. Duncan) that if one wants to understand the overall impact of the Budget, the best thing to do is not to listen to it but to read the economic press about two days later, which gives a much better picture of what is going on. Any Chancellor must make a balanced decision between two imperatives: on the one hand, a pulverising if partial interpretation of the Budget to satisfy the audience in the Chamber; and on the other hand, a calmer more balanced interpretation from the wider world. We have moved too far towards the former. The selective presentation in Budget speeches is one contributory cause of the public's growing cynicism towards politicians, about which we are all concerned.
	Yesterday, that point was well made to the Treasury Committee by Robert Chote of the Institute for Fiscal Studies. He rightly identified 45 policy decisions listed in the Red Book on pages 188 and 189. Seventeen of those were listed in the Chancellor's speech. Those 17 total £553 million, either in spending increases or tax reductions—good news. Twenty-eight, however, were either not mentioned or mentioned in passing, and those, totalling £780 million, were the bad news. I want to return to one or two things that the Chancellor did not mention.
	When my hon. Friend the Member for Tatton (Mr. Osborne) winds up, I hope that he will say that my party will vote against resolution 26 on income tax and computer equipment, which withdraws the tax allowance to encourage employees to work from home. In the Red Book, that change appears under "modernising the tax system". I am not sure why it appears in that category. If one wanted a justification of the accusation that the Chancellor was an analogue politician in a digital age, the withdrawal of that form of relief would be it. The relief was introduced only three years ago by the Chancellor, and it hits a number of buttons. It promotes a better work-life balance, reduces the need to commute and travel into the office, and promotes a wider understanding of IT through having more equipment in the home. I cannot understand why, at two weeks' notice, against a background of the Department of Trade and Industry promoting the scheme on its website, it is suddenly to be withdrawn. I hope that there might be second thoughts, and perhaps a postponement of the scheme for two years to allow the benefit to filter through.
	I want to focus on one of the items not mentioned by the Chancellor in his speech—the cancellation of the pensioner council tax rebate. That has saved the Government £1 billion, but one will not find that figure in the Chancellor's speech or the Red Book. In the section, "Fairness for Pensioners", I read:
	"The Government is committed to tackling pensioner poverty and rewarding saving, and to enabling people to meet their retirement income aspirations in an ageing society."
	There is no mention of the cancellation of the rebate in that section, but it does mention the continuation of the winter fuel payments, which are of roughly the same value, and highlights free bus travel. I find it amazing that the Budget decision that perhaps has the greatest impact on the highest number of people was mentioned neither in the Budget speech nor in the Red Book. It seemed to me that the withdrawal of £200 from every pensioner household not on benefit might be worth just a passing reference under "Budget measures and their impact on households", on page 11 of the Red Book, but it is not there. It is glossed over in paragraph 1.36, which looks back to 1997 to give a slightly different perspective of what has happened to pensioners, in contrast to an earlier paragraph on families with children, which compares the position this year as against the previous year.
	What has happened since last year for the Government to change their view on the pensioner rebate? In the pre-Budget report before the last election, the Chancellor said:
	"A society is judged by its generosity to its children and the elderly, who have served the community all their lives."
	He went on to say:
	"This Pre-Budget Report therefore announces that, in addition to these existing measures"—
	the winter fuel payments—
	"the Government will make a payment of £50 to households with someone over age 70 in 2005."
	In the 2005 Budget, however, he increased that sum. On 16 March 2005, he said:
	"In 1997, there was no winter fuel allowance. This autumn, we will again pay a £200 winter fuel allowance for pensioners—£300 for the over-80s. In the pre-Budget report, I announced a £50 council tax refund. Today, with the resources now available, I can announce that we will pay to every pensioner household, 65 and over, paying council tax, a refund not of £50 but a council tax refund of £200—a measure that is fairer and worth more to more pensioners than all other proposed schemes."—[Official Report, 16 March 2005; Vol. 432, c. 269.]
	The Budget 2005 Red Book made it absolutely clear that that was to help with the council tax:
	"The Government understands the position of older people on fixed incomes facing pressures such as council tax bills."
	The Chancellor went on to announce the additional item.
	Last year, council tax had increased by £525 since 1997, when the Government took office. Against that background, it was worth introducing additional help of £200. This year, the council tax has increased by £579 since 1997, but that extra help is suddenly no longer available. The Government boast that the average council tax has gone up by £54, but not if one is a pensioner—for a pensioner, it has gone up by £254. That wipes out the increase in the state retirement pension for a large number of people. People wonder why there is any cynicism in politics. The most cynical decision that the Government have taken is to spend £800 million last year, just before a general election, on a £200 pensioner rebate, and a year later, when the council tax is even higher, to withdraw it and not even announce it in the Budget and the Red Book.
	Will the Chief Secretary answer two questions? First, when the Deputy Prime Minister agreed with the Chancellor the sum for block grant for local authorities last December, did the Chancellor tell the Deputy Prime Minister that he planned to withdraw the £200 rebate and therefore make the presentation of the council tax even more difficult? Secondly, was it not the case that, if the council tax was about to be replaced, the Treasury might have been able to afford the rebate for another year or two? It has now realised that the council tax will not be replaced, probably for the lifetime of this Parliament, and for that reason has decided that it simply cannot afford to carry on with the £800 million or £1 billion cost of the scheme.
	When the Chancellor gives his next Budget—I think that he will give another one—I hope that it will include a measure to deal with the issue that I have talked about, and to deal with the more strategic issue of what will replace the council tax in the longer term, and how we will come up with a fairer system of funding local government.

Adam Price: It is always a pleasure to follow the right hon. Member for Oldham, West and Royton (Mr. Meacher) and to hear in his speech echoes of what, in my youth, we used to call the alternative economic strategy, which is much needed even today.
	I was struck by something said by the right hon. and learned Member for Rushcliffe (Mr. Clarke). Of course, it is true that economic policy has become slightly boring under this Government, although that could be to the Chancellor's credit. Balance of payments crises were enlivening, but that was of little cheer to the people who suffered as a result. Not even the Chancellor, with his considerable reserves of self-belief, would argue that he has abolished the business cycle. Crises may not be as cyclical as they were under previous Governments, but they are structural, sectoral and spatial.
	I want to talk about the pensions crisis, future and present, the manufacturing crisis, past and present—it may not have much of a future, as the right hon. Gentleman has argued—and the energy crisis that is looming on the horizon. I also want to talk about the north-south divide, which can hardly be called a crisis because it has been with us so long. Certainly, in Wales, we can trace it as far back as the collapse in coal prices in 1924. Despite its long pedigree, it is no less serious, and it has worsened under the Government's charge.
	Let me take pensions first. I am not referring to the looming deficit in the public sector pensions, which is obviously very much in the forefront of our minds today; I am talking particularly about the problem of deficits in the corporate sector that have clearly caused 85,000 workers to lose their pensions over the past few years. Sadly, they have not been recompensed in full by the Government. There is a huge problem with pension liabilities in the private sector, and more and more companies are being pushed into bankruptcy, which is causing massive job losses. As a result, companies are increasingly diverting some of the money that would have been available for capital investment—we have heard about the downward pressure on business investment—to their pension schemes because of those liabilities.
	A large part of the problem is of the Government's making—it is within their control—and I am talking about gilt yields, which have reached absurdly low levels under this Government. Of course, the lower the yield with gilts, the bigger the pension fund deficit. Long-term index-linked bond yields are now at 0.75 per cent. Although that is ridiculously low, it is, of course, very good news for the Government's Debt Management Office, but bad news for virtually everyone else: bad news for pensioners and for the companies that are facing huge problems.
	Of course, the Government argue that there is no clear evidence that increased pension contributions have significantly affected business investment in aggregate, according to the Budget statement. They argue that there is record profitability in the corporate sector, so it should have the resources even to cope with those higher demands. The problem is that profitability is uneven in the corporate sector. Many of the companies, particularly in the manufacturing sector, that have final salary schemes and are therefore coming under the greatest pressure do not have the profitability that is evident in, for example, the banking sector. That argument simply does not hold.
	The reasons for the problems with gilt yields relate to the fact that the Financial Services Authority has changed the rules on solvency for insurers, forcing them to hold more gilts, as a result of its interpretation of the bear market, and particularly to the introduction of the Pension Protection Fund, which, given the risk-based levy, is creating a huge incentive for pension funds to take on more long-term bonds, which are lower earning but lower risk. As a result, we have the bizarre position that the pensions industry is driving up the price of gilts, thus leading to lower yields.
	Of course, the pensions industry will suffer more than any other because of falling yields. So we have a vicious cycle. The Government are not issuing enough bonds. Promises were made. The industry was expecting £70 billion in extra bonds, but got only £63 billion. The analysis of most independent observers is that there is a structural deficit of long-term bonds running into hundreds of billions of pounds, given the need of pension funds to take on Government securities.
	So there is an insatiable demand, which will drive down gilt yields even further—thus driving more companies out of business, causing more pension fund deficits and possibly overloading the Pension Protection Fund, behind which the Government have so far refused to stand in the event of a major crisis. I hope that the Chancellor is not doing that because it is a source of long-term cheap finance. That would be an incredibility short-term policy, especially as the current position is not sustainable.
	The manufacturing position has been well outlined by the right hon. Gentleman, and I need not support his comments further. We have experienced a serious fall in the growth of business investment, as well as in spending on R and D. The Government have said that one of the key long-term determinants of productivity growth is the amount of capital investment per worker. As has been argued, there has been a sustained, long-term failure on the part of the UK business sector to invest capital. I was interested to hear in the Budget statement the figures on business investment, which now include private finance initiative capital investment. Previously, expenditure on the health and education infrastructure would have been included under Government investment; now, it is included under business investment. If one removes that element from the figures, it is clear that business investment growth is even worse. We need to be absolutely clear that the £10 billion extra that is being included next year will distort the business investment figures.
	In addition to problems with manufacturing and the poor record on business investment, the transport infrastructure is very poor. Incredibly, this week's official figures show that on average—I do not exaggerate—roads in Wales are resurfaced every 97 years. That is incredible. I can think of no other country in western Europe, let alone one in eastern Europe, that is in such a position. Moreover, there is the ongoing tale of UK workers with very low skills levels, problems with basic literacy and numeracy, and the problem of rising energy costs.
	All of that feeds into the growing north-south divide. The hon. Member for Bristol, East (Kerry McCarthy) referred to the Government study on English cities, published at the time of the Budget, which itself pointed out that the "industrial powerhouses" of the past—Liverpool, Sheffield, Newcastle—have found that
	"the transition to a knowledge-led service-based economy has not been easy".
	That is an understatement, if ever there was one. The report goes on to show that the problem is the "over-dominance of London" in the UK economy. We have been making that point ad nauseam for many years. Cambridge Econometrics' figures, published this week, show that the situation is getting worse under this Government. According to its report, growth in the past nine years has been slowest in Scotland and in the north of England, where gross domestic product rose by 6 per cent., rather than by the UK average of 24 per cent., over the same period. That is a huge divergence in economic performance. It is only because of the downturn in the London financial services sector in the past three years that the divergence has not worsened.
	So what do we get? Because of recent problems with London's financial services sector, we get a report on the problems of London's financial services sector. Where was Government leadership on the problems of the manufacturing-based economies of the west and the north of these islands? We in Wales have experienced a net loss of 72,000 manufacturing jobs since this Labour Government took office. Indeed, under their policies there has been a net loss of 7,000 manufacturing jobs in the past year alone. They should not be sanguine about unemployment. Unemployment in Wales is rising twice as fast as in the rest of the UK—a pattern that we will begin to see in all the regions in which manufacturing is still the economic base. Of course, the intermediate business services that serve that sector are also vital to our economies.
	Under this Labour Government, there are even 11 UK localities that have seen a real-terms decrease in gross value added per person. That is incredible: 11 localities are actually going backwards in real terms under a supposedly socialist, redistributionist Government. Four of the five localities at the bottom of that list are in Scotland and Wales. The stark message is that we will have less of the policy-based evidence-making that we have seen too much of under this Government. The UK's regional, local and national economies have become more divergent, more quickly, than even under the Government of Mrs. Thatcher.

Iain Wright: It is a pleasure to follow the hon. Member for Carmarthen, East and Dinefwr (Adam Price), whose technical expertise in these matters is obviously very great. I want also to pay tribute to the speech from my hon. Friend the Member for Doncaster, North (Edward Miliband), who unfortunately is no longer in his place. He took us back to the year 1988, which I remember very well. That year, I did my GCSEs, left school and met my future wife—so it was not all good.
	I want to concentrate on how the broad macro-economic factors mentioned in the Budget will impact on my region of the north-east. With that in mind, I was particularly pleased that my right hon. Friend the Member for Darlington (Mr. Milburn) contributed to this debate, and I believe that my hon. Friend the Member for Bishop Auckland (Helen Goodman) is also hoping to catch your eye, Mr. Deputy Speaker.
	I warmly welcome the Budget's emphasis on addressing the drivers of productivity: improving competition, promoting enterprise, supporting science and innovation, raising skills levels and encouraging investment. Addressing these issues is a prime concern in my region. We in the north-east have reason to be optimistic, and given that it is my right hon. Friend the Chancellor's 10th Budget, it may be worth pointing out that in the past 10 years, we have seen a 10 per cent. increase in the number of jobs in the region. The number of business start-ups is increasing and more young businesses are surviving—at a better rate, in fact, than in any other region. However, we need to address the long-term structural weaknesses in the north-east's economy and our economic performance in relation to the rest of the country.
	Despite improvements, far too few people in our region are in employment. For example, unemployment in my constituency has fallen from 9.9 per cent. in 1996 to 4.6 per cent. now, but that is still too high. Although the north-east has broadly the same ratio of working people to the total population as the national average, some 11 per cent. fewer are economically active. It has been estimated that if the north-east raised the proportion of people in work to 80 per cent.—the Government's medium-term target—its output would increase by some £12 billion. That would have a tremendous impact on the UK economy, but more importantly, it would transform the lives of the people of the north-east.
	Our skills profile is also relatively low. Despite real improvements since 1997, our region still suffers from appalling disadvantages at the lower end of the skills sector. More than a third of the working population have either no qualification or are qualified below level 2—four to five percentage points below the rest of the country. As my right hon. Friend the Chancellor has rightly identified, globalisation and intense competition from the likes of China and India will make it increasingly difficult for those with low skills to be part of our economy. For economic reasons, but also for social and moral ones, we as a country need to move away from low-paid, low-skilled work. On reading yesterday's Hansard, I was particularly struck by the comments of my hon. Friends the Members for Coventry, South (Mr. Cunningham) and for Burnley (Kitty Ussher). I agreed with everything that they said in promoting manufacturing in the north-west and the midlands.
	The north-east still has a relatively high proportion of manufacturing industries and jobs. Speaking as a Member who wants the north-east to retain and build on its reputation as an area of excellence in manufacturing, I believe that the threat from China and India means that we will have to be even more innovative, and provide the world with higher value-added manufacturing goods. The region therefore has to be even more determined to improve its skills base, and to do so faster than other parts of the country.
	The third structural weakness is that our region's culture suffers from a relative lack of enterprise. Despite recent success, our region has significantly lower business start-up rates than other parts of the country. Both public-funded and privately funded research and development is disproportionately concentrated in the south of England. However, I hope that the expansion of R and D tax credits for small and medium-sized enterprises announced in the Budget will help matters.
	The culture to which I refer goes back decades. The north-east has suffered greatly from the legacy of heavy manufacturing decline. In the 20th century, towns such as Hartlepool did not have the cultural identity to encourage enterprise. Men such as my grandfather were part of a mass work force in the shipyards, steelworks and factories. Tens of tens of thousands of men—they were predominantly men—were employed to do the same thing, often for years at a time. Innovation, enterprise and creativity were not encouraged because they were not considered necessary.
	When decline came in the 1970s and 1980s, exacerbated by the policy decisions of the last Conservative Government, we saw mass unemployment and the subsequent social problems that accompany it. Culturally, the collective psyche of Hartlepool and the north-east found it understandably difficult to move on from the safe, risk-averse feeling of being part of a large work force to being risk-aware, innovative and ambitious, so I welcome the Budget announcements to encourage enterprise and instil a culture of entrepreneurialism. I agree with the excellent points in a similar vein made earlier by my hon. Friend the Member for Bristol, East (Kerry McCarthy).
	A local enterprise growth initiative—or LEGI—was announced in last year's Budget, to provide substantial sums to the most deprived areas to stimulate economic activity and productivity. The first round of successful applicants was announced recently and I was disappointed that Hartlepool was not included, although as my speech is about the north-east economy, I congratulate my right hon. Friend the Prime Minister and the Minister of Communities and Local Government, my right hon. Friend the Member for South Shields (Mr. Miliband), who secured LEGI funding. I hope that Hartlepool will be more successful in the second round of LEGI funding in 2007–08, because I genuinely believe that my constituency, which has some of the most deprived areas in the country, requires that investment to boost activity, performance and productivity.
	I welcome the moves in the Budget towards enterprise education: the creation of the schools enterprise education network, the establishment of enterprise summer school pathfinders and the launch of the United States enterprise scholarship scheme for undergraduates. The argument that enterprise can be learned in a classroom may be sneered at in some quarters, but such schemes play a large role in embedding a can-do attitude and fostering an enterprise culture that provides young people with the confidence to start their own business or to suggest innovations in the workplace. In the long term, that must be good for the productivity of our economy.
	Closely linked to the enterprise culture is the need for high skills in the workplace. The Chancellor's emphasis on education in his Budget statement was absolutely right. Education is the route out of poverty and the real way to transform lives. The opportunity to receive a good education should not be based on who a child's parents are or how much money they have. My right hon. Friend was right to point out that increased investment in education makes a real difference. We need only look at my constituency to see that.
	In Hartlepool, we have doubled spending per pupil since 1997. We have increased the number of teachers and doubled the number of classroom assistants. As a result, Hartlepool has achieved the fastest improving education results in the country over the last few years. The percentage of 11-year-olds achieving the accepted level or above in English has risen from 48 to 79 per cent. The percentage of 14-year-olds achieving the accepted level or above in maths has risen from 47 to 75 per cent. In 1997, only 30 per cent. of children left school with five GCSEs at grades A to C; now, the figure is 53 per cent. More students than ever are going on to study A-levels and going to university. So it is quite insulting that on the day of the Budget the shadow Chief Secretary said, on "BBC News 24", that increasing state school spending was "not the answer".
	My concern about those real improvements in education is that well-educated young people are moving away to university and being sucked into the economic powerhouses of London, the south-east and other cities, which means that towns such as Hartlepool are losing their foundation for ongoing economic success. A sense of place is vital to boost productivity and prosperity in deprived areas such as mine, and I hope that the initiatives announced in the Budget will do more to encourage people to stay in the north-east and grow businesses.
	Obviously, there is more to do, but I am encouraged by the progress made so far and feel passionately that the Chancellor's announcements last Wednesday will improve matters still further.

Daniel Kawczynski: Well, we discussed a range of issues. Many of them live in very rural communities and they highlighted their anger about the tax.
	The Chancellor of the Exchequer spoke about the moves that the Government are making to reduce CO 2 emissions and meet our Kyoto targets. As he knows and as the Prime Minister said on Australian television today, Great Britain accounts for only 2 per cent. of CO 2 emissions. I would have been far more impressed with the Chancellor if he had managed to bring to the House an agreement with the Chinese Finance Minister, Mr. Jin Renqing, and if he could convince him to take the matter seriously and to reduce China's CO 2 emissions. If the Chancellor could present the House with a treaty that the Chinese had signed to reduce CO 2 emissions, that would impress me. He is doing very little to make the Chinese more obliging on this matter.
	There was no help for public sector workers. As has been mentioned already, today we have had the largest strike since 1926. Many public sector workers in Shrewsbury are striking today and feel very concerned about the fact that their pensions are going to be changed. They believe that some of the things that are happening in relation to the pension changes are contrary to the law of the land. I am sure that those things will be tested through the courts. What a shame that that the Chancellor did absolutely nothing in the Budget to help those people. I recently saw a delegation of such people in Shrewsbury. Some of them are strong Labour voters, but they informed me that they will never vote Labour again, which greatly encouraged me.
	I do not think that farmers have been mentioned today, but, as I represent an agricultural constituency, I wanted to raise the issue. In particular, I want to talk about dairy farmers. I am so concerned about dairy farmers that I am setting up an all-party group on the issue. Some 70 Members have joined from all sections of the House. I am glad that the Chancellor has just entered the Chamber. What a shame that he failed to say a single thing about our farmers and the crisis that British agriculture is facing. He is so obsessed with Labour strongholds that he fails to remember the crisis of our rural community. There was not a single extra penny for that, in a week when there have been calls for the resignation of Lord Bach, who has appallingly mismanaged the single farm payments scheme, which has had appalling ramifications for Shropshire and Shrewsbury dairy farmers. In fact, I know of only one farmer who has received his single farm payment so far. We were promised that the bulk of our farmers would receive their payments by the end of March. It is now the end of March and next to none of them have received their payments. Before the Chancellor leaves the Chamber, I hope that he takes on board my strong concern—[Interruption.] No, he is not taking it on board; he is leaving—as usual. But I hope that, in the future, he does take on board the concerns of Shrewsbury dairy farmers.
	Lastly, I will talk about something close to my heart. Today I held a Westminster Hall debate on the provision of money to senior citizens who are in care homes or nursing homes. Unfortunately, not a single extra Member of Parliament attended my debate, which I was very disappointed about. However, the issue is huge and affects a lot of people in Shrewsbury. I have many people coming to see me who have had to sell their parents' home to pay for long-term care for them. I know that my generation will not be able to rely on the state to provide such care, which is why we will have to take out insurance policies to look after our parents, but members of this generation believe that it is the responsibility of the national health service and the state to provide long-term care in nursing homes. So I am very regretful—[Interruption.] The hon. Member for Doncaster, North (Edward Miliband) is making hand movements at me. I am not quite sure what he is trying to say.

Helen Goodman: I am pleased to take part in the Budget debate, and to follow the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski), who seemed not to acknowledge that spending on the NHS is now at a record high and that we are going to have an increase of £6 billion next year. He displayed the attitude to climate change that Labour Members are becoming used to hearing: he willed the ends, but not the means. Indeed, from what he was saying about China, he seemed to be looking urgently for a translation from Shrewsbury to Shanghai. I am also pleased to follow my right hon. Friend the Member for Oldham, West and Royton (Mr. Meacher), who spoke about manufacturing, which is a concern in my constituency, and my hon. Friend the Member for Hartlepool (Mr. Wright), whose seat is in the north-east and who spoke eloquently and with compassion about the needs in the north-east.
	Last November we held a conference in Bishop Auckland to examine the needs of the local economy, which is largely manufacturing based. We brought together small and large businesses, trade unionists, academics and policy makers to consider how to develop our manufacturing sector in an economy increasingly dominated by services and threatened by low-cost competition, and how we will ensure that workers have the skills needed to innovate and encourage entrepreneurship.
	I believe that active government can make a different to local economic success. In the north-east we should resist the temptation to engage in special pleading based on relative economic weakness. Instead, we must focus on using the potential of local people, too many of whom are still workless and, as my hon. Friend described, lack the skills and confidence to succeed. We need to create a framework that encourages businesses to innovate, invest and grow. That cannot be achieved through a laissez-faire approach that assumes that the market will take care of everything. It requires active intervention by Government agencies to embed skills in the work force, develop transport and communications infrastructure, and strengthen business networks.
	At the conference, Professor Ian Stone of Durham university business school pointed out that 100 years ago the north-east economy had all the qualities that we need now: leading edge sectors, a strong demand for products and services, high levels of innovation, dynamic industrial clusters, a skilled work force, high productivity and growth, and net inward migration of skills. Of course there are examples of that today, such as NETPark, on the border between my constituency and the Prime Minister's. It is a partnership between the local authority, the university and the private sector to promote new technology. None the less, we need to strengthen such qualities.
	George Cowcher of the North East chamber of commerce undertook an interesting survey of what manufacturing companies in my constituency wanted. Their priorities were work force skills, better transport infrastructure, less red tape, better business support and access to finance. Tommy Brennan of the GMB called for support for manufacturers and environmentally friendly technologies. I shall assess the Budget against those demands.
	First, on work force skills, the Chancellor of the Exchequer is surely right to increase resources in our schools. There has been a tenfold rise in schools investment since 1997, and the 50 per cent. rise in schools investment next year will make a huge difference. For example, there will be a completely new school in the village of Byers Green, where teachers and pupils are now struggling in a 1915 building. The extra money for science teachers and new science clubs will be welcomed both in the Glaxo plant in Barnard Castle in my constituency and in Bishop Barrington school, which I visited recently. The school has had one new lab, but needs another one. The Chancellor's approach will build on collaborations such as that in the North East process industry cluster, which provides visits and science training for local schools.
	The new entitlement to, and grants for, further education for people up to 25 will have a significant impact in my constituency. Bishop Auckland college is now getting a completely new building to accommodate the 60 per cent. rise in students in the past five years.
	On transport infrastructure, County Durham needs better roads going south and north. The extra £800 million outlined in the Red Book is enabling the A66 between North Yorkshire and County Durham to be dualled, which will both improve safety and cut business costs.
	As someone who used to run a small voluntary organisation, which is a sort of small business, I am sympathetic to calls from business for less red tape. I am sure that business will benefit from the new code for risk-based regulation and the proposals to introduce that in Europe, too.
	Manufacturers in my constituency said that they wanted business support and more streamlined one-stop shops. The growing role of the manufacturing advisory service, and a smaller number of business services offering more targeted support, represent the right way to go. There are young entrepreneurs in the north-east who will benefit from the national enterprise network of 200 summer schools. Accessing finance for small and growing businesses can be hard, so the proposal to expand the R and D tax credit, the new tax relief for investment in venture capital trusts and the £100 million of new money to double enterprise capital funds are all welcome.
	The Chancellor of the Exchequer's proposals to support our renewables and energy efficiency industry will achieve three objectives—our climate change targets, our obligations to the developing world, and the sustainable development of our manufacturing base. The new environmental research institute and the seed-corn finance for the first enterprise capital fund for the environment demonstrate the Government's commitment to action, which contrasts sharply with the position of Opposition Members. In addition to the 5 per cent. biofuels quota, the increase in the duty differential for biofuels will be of particular benefit to Farmway—a farmers co-op in my constituency engaged in its manufacture.
	As my hon. Friend the Member for Hartlepool said, in the north-east, labour market participation is below the national average. Sue Stirling of the Institute for Public Policy Research north believes that if we could get recipients of incapacity benefit into work, we would close the gap. There is already a successful pilot at the Bishopgate medical centre to support people back into work, so the proposals to reform the linking rules for incapacity benefit, which discourage some people from experimenting with taking jobs, are very welcome.
	Before the Budget, I met members of the Wear Valley pensioners association. One of the things that they most wanted to see was the extension of free bus passes nationwide, so I am sure that they welcome the £250 million that the Chancellor is providing for free bus travel nationwide next year. Such travel will be available to all 17,600 pensioners in my constituency.
	In February I visited Mr. and Mrs. Hodgson, who had benefited from a Warm Front grant. Improving energy efficiency is the best way of tackling fuel poverty and meeting our climate change objectives, so I am especially pleased that the Chancellor has increased the number of households that will benefit by 250,000 over the next two years.
	The people of Bishop Auckland are not focused on their own interests alone, however. During Fairtrade fortnight, many of them signed a petition calling for the Government to keep their promise to raise aid to 0.7 per cent. of GDP, so they will be pleased by the increase in development aid set out by the Chancellor.
	Opposition Members simply fail to understand the significance of the Government's successes and long-term strategy for the British economy. Since 1997 unemployment in my constituency has fallen by 41 per cent., and it has fallen by 11 per cent. in the country as a whole. Prudent fiscal and monetary frameworks have brought new stability to the British economy, and low inflation and interest rates enable businesses to plan and invest. That has allowed a steady programme of investment in public services. The Conservative party is committed to cutting public spending as a percentage of GDP, irrespective of need or circumstances. However, it will not tell voters which services it would cut. People need to know, because those public services not only improve our quality of life, but provide the skills and infrastructure for our long-term economic success.

Stewart Jackson: Delighted to. Obviously the hon. Gentleman has not been reading Hansard. For every year of the Conservative Administration, between 1979 and 1997 we spent 64 per cent. above the rate of inflation, and for every week that we were in power we spent £1 million on a new capital project. He will have to ask a trickier trick question next time. [Interruption.] Those are the figures, if he wants to check them.
	On crime and policing, the Chancellor talks about police community support officers, but those are not fully trained policemen and women. They are decent civic-minded people who will do their best, but they are not policemen. We also hear about the regional forces that are being forced on our constituencies, allegedly costing more than £550 million, according to the Association of Police Authorities. The Government are going to fund that policy, possibly to the tune of £150 million, although no one wants it. It is a top-down approach. The police and local people are against it, but the Government have an arrogant disdain for local views and will go ahead with it anyway. As a result, we have to find £400 million from the council tax in my area and throughout the country—£400 million that is not being spent on crime fighting or tackling drugs, violent crime or antisocial behaviour, because it is being spent instead on new badges, new buildings and new management structures. That matters.
	Let me give the detection rates for my basic command unit, the northern division of Cambridgeshire. Some 53 per cent. of sexual offences are detected, which means that 47 per cent. are not solved; 15 per cent. of burglary cases are detected, so 85 per cent. are not solved; and 20 per cent. of vehicle thefts are detected, which means that 80 per cent. are not solved. That is after nine years of a Government who came to power saying that they were tough on crime and tough on the causes of crime.
	The Chancellor of the Exchequer is an old man in a hurry. Last week's Budget was a "cones hotline" Budget. It had no vision, it was full of bombast and hyperbole, and it was empty and vacuous. I note that the Prime Minister, even 12,000 miles away, has got his betrayal in first, so the Chancellor may not move next door very quickly. The Budget is full of gimmicks, and although it does not have any price tags or time lines, it includes the much vaunted reannouncement of education spending. It fails the people of my constituency and, above all, it fails the country.

Martin Horwood: The Budget claimed to be a Budget for education and a green Budget, but as my hon. Friend the Member for Twickenham (Dr. Cable) pointed out, there were disgraceful omissions from the Budget in those respects and also in respect of the NHS. I shall take each of those in turn.
	Education takes many forms, including the learning of IT skills. I am pleased that in the debate many hon. Members have mentioned the home computing initiative. There is a long history of using computers in my family and my constituency. My father, Don Horwood, helped to build the very first programmable digital computer, Colossus, during the 1940s at Bletchley Park. Bletchley Park became GCHQ and moved ultimately to Cheltenham, so there is a good connection.
	Many families are excluded from the IT revolution that took place during my father's lifetime, sometimes because of their low incomes and sometimes simply because of inexperience in IT. The home computing initiative was a valuable programme not only because it gave access to IT equipment, but because it improved the employment prospects of those on low incomes and their families, and increased the overall set of IT skills of the nation, thereby increasing our productivity—another Budget theme.
	It is disgraceful that the home computing initiative was abolished in the Budget. That was not flagged up in the Budget statement, of course, but was buried in the small print. The home computing industry was not consulted or informed beforehand, despite the existence of an industry body, the home computing industry alliance. I have had angry e-mails from constituents who are in the industry and who are appalled that that was done at such short notice and in such a sneaky back-door way. It is a very unfortunate cancellation of a valuable scheme.
	Support for the NHS has been identified by other hon. Members as a subject that was not mentioned in the Budget speech. It is an outrage that it did not rate even a mention at a time when the NHS is in financial crisis. I do not represent one of those legendary 6 per cent. of areas that are in deep financial crisis. I speak for an area represented by Cheltenham and Tewkesbury Primary Care Trust, which, as my neighbour, the hon. Member for Cotswold (Mr. Clifton-Brown), knows has been in financial balance. It is a three-star primary care trust. We have an acute trust, Gloucestershire Hospitals Trust, which is a relatively low cost provider of services, doing exactly as the Government wanted it to do. We even have a mental health partnership trust, which is a three-star trust hoping to apply to be one of the first partnership trusts to gain the much-vaunted foundation status. That is precisely the kind of area that should not be in crisis.
	Why, in that case, was it announced today that Battledown children's ward in my constituency will close as a 24-hour in-patient facility, despite pledges from all three primary care trusts and the acute trust last year that it would stay open? Why will St. Paul's maternity wing close in due course, and why will the Delancey rehabilitation hospital probably close? Why are adult mental health services to be rationalised, and a range of other services that were provided in both Cheltenham and Gloucester to be provided in only one place? I suspect that my neighbour, the hon. Member for Cotswold, will be considering community hospitals and local NHS services in his constituency with some trepidation given the overall package.
	Why has that devastating news been delivered to the people of Cheltenham today? The answer is that the Department of Health got its sums wrong. Initiative after initiative, contract after contract and target after target have been inadequately funded by the Department of Health. The result has been the requirement for some £29 million of savings across the three PCTs in Gloucestershire and £10 million lost to Gloucester Hospitals NHS Foundation Trust, even if it stands still on its current activity. That is an unacceptable attack on front-line services, and I agree with my hon. Friends that it could cost lives.
	I am grateful to you, Madam Deputy Speaker, for allowing me to leave the debate to meet the Secretary of State for Health tonight. I asked her why a PCT that is in balance and that has a low-cost acute trust provider is facing such cuts. She said, "We can't take funds other than from the NHS to bail out the overspending PCTs." "Can't"? The Chancellor keeps telling us that he has 10 years' experience. Why "can't" the political will be found to protect services, even in the areas of the NHS that have been in balance and that have done everything that the Government have asked of them? Furthermore, those events are taking place while the threat of pandemic flu hangs over the NHS—this is the very time when we should be looking at increasing capacity in the NHS, not cutting it.
	Finally, the Chancellor claims to have produced a green Budget, but it is a very pale green. For all the Government's protestations, the simple fact remains that CO 2 emissions are going up, not down. Today's conveniently delayed climate change review—it is a shame that there was not enough time to produce it just before the Budget speech—makes it clear that the climate change levy has been frozen since its creation and that it will be increased only in line with inflation from 2007. Let us hope that climate change itself proceeds only at the rate of inflation with six-year pauses, although that is unlikely, because, as the evidence shows, while the Government are slowing down, climate change is speeding up.
	It is also disappointing that the Chancellor has only partially implemented Liberal Democrat policy by placing higher vehicle excise duty on the most gas-guzzling vehicles and introducing a zero rate for those vehicles that are the lowest consumers. However, the rate is feeble, and, as Conservative Members have pointed out, there is no protection for rural farmers who genuinely need such vehicles. Instead, the owner of a Porsche Cayenne, which the Environmental Transport Association lists as one of the worst offenders and which costs between £30,000 and £50,000, now faces an extra bill per annum of £30, which is rather less than the cost of one Porsche Cayenne windscreen wiper.
	At this point in my speech, I must declare an interest, because, like the right hon. Member for Witney (Mr. Cameron), I have got the builders in to plan an extension to my house. I plan to install a mini-wind turbine, a combined heat and power boiler and solar panels, but I was surprised to discover that some of the grants that I was hoping to take advantage of under the clear skies programme seem to have run out. There is no provision in the Budget, not even in the small print, on householder microgeneration. On an MP's salary, I may be able to afford to go ahead, but many others will not. Earlier in the debate, the Minister gave me a disingenuous answer on that point, because, although he discussed supporting microgeneration for the Government's own buildings, he made no firm commitment on householder microgeneration. Microgeneration has huge potential to reduce emissions and fuel poverty, to lower fuel bills for a wide section of the population and to more than fill the gap left by the nuclear industry were we to decide—rightly—to decommission it completely.
	The truth is that the Budget has failed to support education and productivity, to save the NHS from financial crisis and to protect the environment. Unless the Chancellor fails with his next job application, it will go down as his greatest missed opportunity.

Joan Walley: The contributions to tonight's debate have been detailed and far-ranging, and they show the in-depth interest and attention that all hon. Members pay to every single aspect of the Budget. So many themes have come out of the debate, but I want to concentrate on my concern about the Budget.
	I want to make a plea to the Treasury, the Chancellor and the Department of Trade and Industry to deliver a cross-cutting Budget. We should examine how the different measures in the Budget can be joined up across Departments and linked to partners on the ground. We have heard so much about issues such as social justice and child poverty, but we need the capacity on the ground to make the measures in the Budget a reality. That is my plea to Ministers tonight.
	It is a privilege to take part in this debate. This is my right hon. Friend's 10th Budget and many other hon. Members have commented about how the public finances are now on a level playing field. It is so important to take that forward. I am a member of the Environmental Audit Committee which has examined the pre-Budget report and other Budgets for their green capacity. The Committee's reports always seem to conclude that the Government should do more, but that is true no matter how much Governments do. However, we should give the Government credit for the real step change in the Budget, especially in the chapter on protecting the environment.
	I welcome the progress on environmental issues. As the climate change review published today shows, there is still so much more that could be done. It is up to all of us to work collaboratively, whether through environmental improvements to our own homes, informing our constituents or getting our local authorities to adopt a leadership role on environmental issues. The Budget provides the foundations for real progress on environmental issues, not least in respect of microgeneration, at work, in schools and in all the public finance undertakings.
	The Environmental Audit Committee is cross-cutting in looking at all Departments, and I want to look at some of the Budget measures in the same way, especially those that will have a real impact on my constituency. I hope that Ministers will work with north Staffordshire MPs to ensure a joined-up approach from the Department of Trade and Industry, the Office of the Deputy Prime Minister, the Department for Environment, Food and Rural Affairs and the Treasury. Unless we have that commitment, we will be unable to deliver services in north Staffordshire as we should.
	I was interested in the remarks by my right hon. Friend the Member for Oldham, West and Royton (Mr. Meacher) about the loss of manufacturing jobs. I wish to flag up our heartlands, especially north Staffordshire, where heavy industry is bearing the brunt of the globalisation that many other hon. Members have mentioned. It is vital that we do everything in our power to create new jobs, to support those who have already lost their jobs and to retrain and give new skills to those in low-paid jobs and who wish to move on. It is important that the review of Advantage West Midlands and the other regional development agencies that my right hon. Friend the Secretary of State for Trade and Industry mentioned earlier looks at what manufacturing needs. We have the wonderful example of the Ceramic Industry Forum, which is looking in an innovative way at what needs to be done. The education maintenance allowance, which was piloted in Stoke-on-Trent, is another wonderful example, and it has now been rolled out across the country. I hope that other schemes can be piloted in Stoke-on-Trent and used to maximum effect across the country.
	This is a Budget for the regeneration of the UK's towns and cities. I declare an interest because my constituency includes Burslem, the mother town of the Potteries. The £65.5 million announced this week by the Office of the Deputy Prime Minister for Renew North Staffordshire will give us unprecedented levels of investment in housing, and I hope that it will unlock many different opportunities for jobs and retraining. It will give us an opportunity to have sustainable methods of construction and to implement on the ground the warm homes policy that was again mentioned in this Budget. If the Government take a cross-cutting approach, this will all add up to a complete transformation of homes and jobs in our area.
	I am pleased that the Lyons review was mentioned in paragraph 6.15 of the Budget. Some 7,800 jobs of the 20,000 proposed have already been moved out of London and the south-east, so there are still 12,000 to go. We have a site in north Staffordshire that could be used for relocation purposes under the Lyons review. It is a stone's throw away from the priority housing market renewal area, which would link up to Burslem. If the Government have the will, we can make it happen on the ground. The job losses that we face in north Staffordshire could give rise to opportunities for the innovative relocation of public services that would allow us to be a true engine of growth. That is the agenda that north Staffordshire wishes to convey to Ministers.
	We have a wonderful resource centre that was originally launched by the Ceramic and Allied Trades union—now Unity. It has a proud record of upskilling and retraining the work force in north Staffordshire, and has had European funding. The education maintenance allowance offers the Government a model for ways of dealing with those in the traditional manufacturing areas who are losing jobs. They need only look at this gem to see how such projects can be rolled out still further.
	It will come as no surprise to my right hon. Friend the Minister for Industry and the Regions to know that I cannot miss this opportunity to lobby yet again on the LEGI—local enterprise growth initiative—fund, phase 2 of which is on offer under this year's Budget. I say categorically to my right hon. Friend that we need that funding for north Staffordshire. If we need extra assistance and capacity in building a project that will meet the criteria, I ask for an assurance that the Government will work with us to ensure that it will be in place as soon as phase 2 gets under way.
	I wish briefly to refer to the Budget information on private finance initiatives—"PFI: strengthening long-term partnerships". We need firm commitments from the Government about the way forward for the public services. Some changes to health service funding are directly affecting the deficits that are occurring in primary care trusts and health trusts around the country. In north Staffordshire, we have a private finance initiative that is nearing the stage of closure. I acknowledge all the welcome investment in research and development in the health service and all the extra resources that the Government are putting in, but my plea is for Ministers to look closely at box 6.1 in the PFI information. I hope that, in the winding-up speech, the Chief Secretary can assure north Staffordshire Members that we can have some certainty about the PFI for the new hospital.
	We currently have two hospital sites, which means all sorts of extra costs that make it difficult to deal with the current position and the huge scale of job losses. Above all, we need certainty and joined-up thinking from the Treasury and the health service that the PFI can go ahead.

Charles Walker: I thank you, Madam Deputy Speaker, for calling me to speak in the first Budget debate that I have attended. I hope that I do not have to listen to 10 more Budgets from the Chancellor, but I listened closely to the one that he gave, I think, last week.
	I was going to bring my worst instincts to the Chamber and talk about the fact that there was nothing in the Budget on pensions, as many of my constituent live in fear of their future—both those who are saving for retirement and those currently in retirement. There was nothing on council tax—a hidden stealth tax that goes up year on year, causing great distress to young and old alike in my constituency. I was going to talk about the problems with transport funding and the fact that my constituents are packed on to trains early in the morning on the One railway franchise as the Treasury pockets £50 million a year in franchise fees and fails to invest that money on the network. But I say, "Get behind me Satan," because I want to be positive this evening, on issues that matter to everyone in the House, including the hon. Member for Doncaster, North (Edward Miliband).
	I was absolutely delighted to hear the emphasis placed on education in the Budget. I have had the great privilege of visiting my primary and secondary schools in Hoddesdon, Cheshunt, Broxbourne, Waltham Cross and Northaw. It is the head teachers who make a difference in those schools. We are lucky and blessed to have excellent head teachers in my constituency. They work extremely hard for a great deal less money than I earn, put in a huge number of hours and are a credit to their schools and the community that they serve. On that point, I welcome the additional funding going directly to head teachers to spend on the things that really matter to them—IT, books and additional teaching resources. That money is very welcome, and I have to say that things have improved since Labour came to power nine years ago. Admittedly they should have improved, as Labour has spent a lot of money. When I visit my schools I see whiteboards and projectors, all of which have added to the educational experience of young people in my constituency. Nevertheless, that has created problems in itself, although I know that the budget was not there to deal with those problems. People are moving out of north London and gangs are regularly attacking our schools, stealing much of the equipment and creating a very hostile environment for young people. Perhaps that is happening in other Members' schools, and perhaps we could consider securing additional funds somewhere down the line to improve school security and the environment in which young people are educated.
	One thing that I have noticed when touring my constituency—

Sammy Wilson: Since there appear to be no more Labour Back Benchers waiting to speak—indeed, the Chancellor has not been praised for the past half an hour or so—I suppose that I should start by giving some praise to the Chancellor for the work that has been done over the years. It would be churlish not to say that, in Northern Ireland, we now have the lowest rate of unemployment and are the fourth fastest growing region in the United Kingdom, and that there have been economic successes. I am not looking for a job so I can say that without anybody saying that I have an ulterior motive.
	I fear, however, that the tightening that is hidden behind the Budget will affect that situation. Already we see the fiscal grip tightening on Northern Ireland. Regional rates have gone up, water charges are to be introduced and we are to have a charge for policing. Much of the economic success will be badly affected by the hidden tightening in the Budget. The Budget shows that the Government will face difficulties in the years ahead.
	Let us consider the meaning of the Budget for the United Kingdom as a whole. Perhaps the clue was in the give-away line when the Chancellor compared himself to Nicholas Vansittart. He may well have been looking back longingly to the days when that Chancellor was able to get 39 resolutions through without any opposition. There were no Back-Bench revolts and there was nobody on the other side opposing the resolutions. On the other hand, Nicholas Vansittart was known for increasing the tax burden, complicated financial schemes for hiding the size of the national debt, paying considerable attention to affecting supposed economies and, of course, privatising naval and military pensions. Perhaps that is the real picture that we get from the Budget and the real picture of the current Chancellor.
	I want to make three brief observations. Amidst the financial machine-gun effect, with £100 million here, £20 million elsewhere, £15 million for microgeneration of energy, new boards for technology, and enterprise networks—those things will be rolled out—there are a number of worrying messages in the Budget.
	The first message is that when the Chancellor says that he gives, it does not necessarily mean that we receive. He announced that there will be more direct payments to schools, with the money for primary schools going up by £13,000 a school and money for secondary schools increasing from £98,000 to £152,000. He said that the same increases would be announced for schools in Scotland, Wales and Northern Ireland, but when the Secretary of State made the announcement for Northern Ireland, we found that a sum of £16 million would be spread among nearly 1,000 schools, but that does not work out at £13,000 a primary school and £54,000 a secondary school. I suspect that there is a lot of spin in the Budget and many initiatives that are simply regurgitations of money that has already been spent, and I could give further examples of that.
	Secondly, more money does not mean better services. I heard Labour Members taunting Opposition Members who wanted tax cuts by asking how they could have tax cuts without cutting services. The fact of the matter is that since the Government came to power in 1997, with "education, education, education" as their agenda, there has been a 47 per cent. real increase in education spending, yet the Chancellor lamented in the Budget that there are still underachieving schools, people leaving school who need a second chance to get further education and A-levels and schools in which there are insufficient science teachers. Spending money has thus not necessarily improved services. In many cases, spending money has simply bloated bureaucracy. If the structures are right, it is of course possible not to take more in tax, yet still improve services. We had this debate on education the other week. If the right structures are in place, improvements can be made to services, even with less money.
	Thirdly, if problems are identified, it does not mean that answers are given. The Chancellor talks about the need for enterprise and a competitive economy. We know that in Northern Ireland because we are heavily reliant on the public sector. We have an open and small economy that does not have internal economies of scale, so we have to export and thus must be competitive. During the years of the troubles, entrepreneurs were forced out by gangsters and so on, so we lost the enterprise culture. The problems have been identified, but I do not see much in the Budget to address them. If anything, the enterprise culture will not be stimulated, and let me give one example to explain why. The tax burden on local companies will increase. The Chancellor could have considered reducing corporation tax—we have seen the success of that elsewhere—but he did not, even though there was consensus about it and evidence that it could have led to an improvement.
	I know that my time is nearly up, so I will conclude by saying that the Budget is not expansionary and will not address the problems that the Chancellor identified. Other hon. Members have pointed out that he has walked away from the great problems that face us, such as pensions and health. Many of the burning problems that the Government should be addressing have not been dealt with in the Budget, so although I accept that there have been successes, I have no hesitation in saying that this is not the Chancellor's best Budget. The Budget will not address the problems that face us.

George Osborne: Yes, he will lose his seat at the election. However, he is right: we have a record tax burden, higher than at any time in our history. It is higher than the last time we had a Labour Government, when half the country was on strike. Instead of following the advice of the right hon. Member for Darlington and reducing taxes, the Budget increases taxes still further. Some £4 billion of taxes on businesses and North sea oil were pre-announced in the pre-Budget report, the zero per cent. corporation tax rate that the Chancellor himself trumpeted in his 2002 Budget has been abolished, and there are iniquitous retrospective changes to inheritance tax. All those tax changes, and 25 others, were absent from the Budget speech, as my right hon. Friend the Member for North-West Hampshire pointed out, but they will all add to the complexity of the tax system.
	Despite that considerable tightening, to which my right hon. and learned Friend the Member for Rushcliffe drew our attention, the Chancellor is still running a budget deficit. It is an extraordinary achievement to have record taxes but still run a budget deficit—and it is getting worse. In the Budget, the Chancellor doubled his estimate for next year's budget deficit from the one that he made just three months ago. He confirmed that he is set to borrow £175 billion over the next six years. He has mortgaged not just today's taxpayers but tomorrow's, too.

George Osborne: I support Bank of England independence and, like the Chancellor, I am looking at ways to entrench it still further. I enjoyed the New Statesman interview with the hon. Member for Normanton (Ed Balls), in which he described himself as a socialist. He said that the finances of the Secretary of State for Culture, Media and Sport were baffling, and that the Secretary of State for Education and Skills had not handled the Education and Inspections Bill very well. I suggest that he spend more time trying to win friends among those on the Labour Benches than trying to intervene on us.
	The situation in the NHS is not the fault of the Secretary of State for Health. The fault lies at the Treasury. The Chancellor of the Exchequer provided the money, but he blocked the reform that would have made the money count. NHS productivity has fallen year on year. Three quarters of the money has disappeared in cost pressures. Now we have close to £1 billion of deficit and thousands of job losses.
	The NHS is not the only thing missing from the Budget. There is not a word on the pensions crisis brought about by the Chancellor's £5 billion pension tax and his extension of means-testing. I hope that he reads the speech made yesterday by the right hon. Member for North Tyneside, who said in the House:
	"I do not think that, when we come to consider a new regime for pensions, we can continue as we have since 1997."—[Official Report, 27 March 2006; Vol. 444, c. 613.]
	Does the Chancellor agree with his former Chief Secretary? We do not know.
	As my right hon. Friend the Member for North-West Hampshire pointed out so powerfully, there was no mention in the Budget speech or the Red Book of the decision to cancel the £200 council tax rebate. My right hon. Friend is right. The Chancellor talks about restoring trust in politics and gives speeches on the subject. How much more dishonest can one get than announcing before an election that pensioners will get a £200 cheque, then withdrawing it without a word of explanation after the election? I guess it is just the Chancellor's own special way of helping the Prime Minister with his local election campaign.
	The Chancellor should at least tell Labour councillors what he is up to. This weekend, after the Budget speech, the leader of the Labour group on Lambeth council wrote to a Mr. Patrick McLoughlin of Kennington Park road, London. A copy of the letter has mysteriously fallen into my hands. It comes with a glossy leaflet—it is interesting that the Prime Minister's picture does not appear on such leaflets any more. Under the heading "What will Labour do?" it states:
	"We will:
	Press the Government to provide more help for pensioners to pay their council tax bills."
	No doubt the leaflets are being pulped as we speak. Labour says one thing in the Chamber and another thing outside. It makes the Liberal Democrats look like amateurs—which is not very difficult with the new leader of the Liberal Democrats.
	Of course, the Chancellor did mention education. It is striking that hardly a single Labour Member who spoke today mentioned the great pledge to raise state school spending to private school levels. That was supposed to be the centrepiece of the Budget, but where is the timetable? How much will it cost? Over what level is spending to be increased? The Chancellor never told us that the Prime Minister made exactly the same pledge five years ago. There we have it—the first great statement of what a Brown premiership would do, and it turns out to be a reheated broken promise from the high days of the Blair premiership. I have a depressing feeling that this is the shape of things to come.

Des Browne: Perhaps I should—[Hon. Members: "More, more!"] It appears that both Chief Whips and shadow Chief Whips sometimes do not know when to keep quiet—[Interruption.] Perhaps the shadow Chief Whip could moderate his tones.
	The Budget debate will be remembered by many as the one in which the contributions from Back Benchers, even when limited to 10 or 12 minutes were longer than the total contribution by the Leader of the Opposition. So there was to be no more Punch and Judy politics. As we have learned over the last few days, old Tory traits have not gone away. Disappointingly, we have had more of that today from the shadow Chancellor, the hon. Member for Tatton (Mr. Osborne). But perhaps I should not have been disappointed by the lack of substance from him. Over the weekend I took the opportunity to read his diary in The Observer. I learned that in the week of the Budget he did several things. He spent considerable time with his children, for which I commend him. He was also reminded that he spent his teenage years watching sumptuous E.M. Forster adaptations, among other things. However, I scanned his contribution in The Observer carefully for the day of the Budget and found nothing, apart from the fact that he sat beside the Leader of the Opposition, who was assailed by a wall of sound.
	This has been a revealing debate and I especially welcome the shadow Chief Secretary, the hon. Member for Chipping Barnet (Mrs. Villiers) to her place. I feared last week that she had done a Letwin—I beg your pardon, Mr. Deputy Speaker, I mean I feared that she had done a right hon. Member for West Dorset (Mr. Letwin)—by exposing Tory cuts and then disappearing into the ether. Despite her absence, she certainly made a contribution to the debate, not least on the matter of our investment in education. As she has been reminded more than once, when asked on "Sky News" last Wednesday whether her reaction to the Government's spending meant that the Tories would be spending less, she replied, "It would, certainly." Later that day, when challenged by my hon. Friend the Member for Normanton (Ed Balls) to match our Budget commitment on education spending, the shadow Chief Secretary refused and replied, "That's not the answer."
	The Opposition were on a roll, because the shadow Chancellor, in interviews, then refused to support her announcements on capital spending and on state school spending. Later that evening, on "Newsnight", he could not mention any measure in the Budget that he supported. The next day, the hon. Member for Wycombe (Mr. Goodman), the shadow Minister for child care, said:
	"Of course we support the goal".—[Official Report, 23 March 2006; Vol. 444, c. 508.]
	Better yet, the shadow Secretary of State for Education and Skills said yesterday
	"we accept the increase in school spending and the capital spending pledge."—[Official Report, 27 March 2006; Vol. 444, c. 649.]
	It is flip-flops all round. First, they want cuts, then they are confused, then they do not want cuts and finally they support our spending plans. What does the shadow Chancellor say now, when offered the opportunity to support our plans? He is unable to answer the question—[Interruption.]
	Let us look at climate change. For the past six years the Opposition have refused to support the climate change levy, which has cut carbon emissions by 28 million tonnes—[Interruption.] Today, they announce—

Des Browne: I will not give way now.
	Underneath it all, no matter now compassionate their rhetoric, the Conservatives still have the desire to cut. We could do that too, of course, but it would be the wrong thing to do, and the Conservatives know it. We cannot face global competition with one hand tied behind our back. Instead, we will have spent some £5.4 billion a year on science by 2008. This year alone, we have invested more than £2.6 billion to renew UK university research infrastructure. This Budget adds to that by creating a single £1 billion a year health research fund. It also simplifies research funding arrangements and expands R and D support for medium-sized companies.
	Our drive is to improve the UK's position as the best location for inward investment, and that means strengthening our reputation as one of the world's finest locations for higher education. It also means promoting London as the world's leading centre for financial and business services. This is a Budget for the future, and for a strong and strengthening economy. I commend it to the House.
	Question put and agreed to.
	Resolved,
	(1) That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.
	(2) This Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—
	(a) for zero-rating or exempting a supply, acquisition or importation;
	(b) for refunding an amount of tax;
	(c) for any relief, other than a relief that—
	(i) so far as it is applicable to goods, applies to goods of every description, and
	(ii) so far as it is applicable to services, applies to services of every description.
	2. Rates of tobacco products duty
	Resolved,
	That—
	(1) For the Table of rates of duty in Schedule 1 to the Tobacco Products Duty Act 1979 there shall be substituted—
	Table
	
		
			  
			 1.   Cigarettes An amount equal to 22 per cent of the retail price plus £105.10 per thousand cigarettes. 
			 2.   Cigars £153.07 per kilogram. 
			 3.   Hand-rolling tobacco £110.02 per kilogram. 
			 4.   Other smoking tobacco and chewing tobacco £67.30 per kilogram. 
		
	
	(2) This Resolution shall have effect as from 6 o'clock in the evening of 22nd March 2006.
	And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
	3. Rate of duty on beer
	Resolved,
	That—
	(1) In section 36(1AA)(a) of the Alcoholic Liquor Duties Act 1979 for "£12.92" there shall be substituted "£13.26".
	(2) This Resolution shall have effect as from midnight on 26th March 2006.
	And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
	4. Rates of duty on wine and made-wine
	Resolved,
	That—
	(1) For Part 1 of the Table of rates of duty in Schedule 1 to the Alcoholic Liquor Duties Act 1979 there shall be substituted—
	Part 1
	Wine and made-wine of a strength not exceeding22 per cent
	
		
			  
			  
			 Description of wine or made-wine Rates of duty perhectolitre  
			  £ 
			 Wine or made-wine of a strength not exceeding 4 per cent 53.06 
			 Wine or made-wine of a strength exceeding 4 per cent but not exceeding 5.5 per cent 72.95 
			 Wine or made-wine of a strength exceeding 5.5 per cent but not exceeding 15 per cent and not sparkling 172.17 
			 Sparkling wine or sparkling made-wine of a strength exceeding 5.5 per cent but less than 8.5 per cent 166.70 
			 Sparkling wine or sparkling made-wine of a strength of 8.5 per cent or of a strength exceeding 8.5 per cent but not exceeding 15 per cent 220.54 
			 Wine or made-wine of a strength exceeding 15 per cent but not exceeding 22 per cent 229.55 
		
	
	(2) This Resolution shall have effect as from midnight on 26th March 2006.
	And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
	5. Hydrocarbon oil etc (rates and rebates)
	Resolved,
	That provision may be made amending rates of duty and rebate in the Hydrocarbon Oil Duties Act 1979.
	6. Hydrocarbon oil etc (road vehicles)
	Resolved,
	That provision may be made enabling amendment of the definition of road vehicle in the Hydrocarbon Oil Duties Act 1979.
	7. Amusement machine licence duty
	Resolved,
	That provision may be made amending provisions of the Betting and Gaming Duties Act 1981 relating to amusement machine licence duty.
	8. Vehicle excise duty (rates)
	Resolved,
	That—
	(1) Schedule 1 to the Vehicle Excise and Registration Act 1994 shall be amended as follows.
	(2) In paragraph 1(2), for "£170" there shall be substituted "£175".
	(3) For paragraph 1B there shall be substituted—
	" 1B The annual rate of vehicle excise duty applicable to a vehicle to which this Part of this Schedule applies shall be determined in accordance with Table A, where the vehicle is first registered before 23rd March 2006, or Table B, where the vehicle is first registered on or after that date, by reference to—
	(a) the applicable CO 2 emissions figure, and
	whether the vehicle qualifies for the reduced rate of duty, or is liable to the standard rate or the premium rate of duty.
	Table A: Vehicles first registered before 23rd March 2006
	
		
			 CO2 emissions figure   Rate  
			  
			 (1) (2) (3) (4) (5) 
			  
			 Exceeding Notexceeding Reducedrate Standardrate Premiumrate 
			  
			 g/km g/km £ £ £ 
			 100 120 30 40 50 
			 120 150 90 100 110 
			 150 165 115 125 135 
			 165 185 140 150 160 
			 185 — 180 190 195 
		
	
	Table B: Vehicles first registered on or after 23rd March 2006
	
		
			  
			  
			 CO2 emissions figure   Rate  
			  
			  
			 (1) (2) (3) (4) (5) 
			  
			 Exceeding Notexceeding Reducedrate Standardrate Premiumrate 
			  
			 g/km g/km £ £ £ 
			 100 120 30 40 50 
			 120 150 90 100 110 
			 150 165 115 125 135 
			 165 185 140 150 160 
			 185 225 180 190 195 
			 225 — 200 210 215 
		
	
	(4) In paragraph 1C—
	(a) for sub-paragraph (2) substitute—
	" (2) Condition A is that the vehicle—
	(a) is constructed—
	(i) so as to be propelled by a relevant type of fuel, or
	so as to be capable of being propelled by any of a number of relevant types of fuel, or
	(b) is constructed or modified—
	(i) so as to be propelled by a prescribed type of fuel, or
	so as to be capable of being propelled by any of a number of prescribed types of fuel, and complies with any other requirements prescribed for the purposes of this condition.", and
	(b) after sub-paragraph (5) there shall be inserted—
	" (6) In this paragraph—
	"bioethanol" has the meaning given in section 2AB of the Hydrocarbon Oil Duties Act 1979,
	"relevant type of fuel" means—
	(a) bioethanol, or
	a mixture of bioethanol and unleaded petrol, if the proportion of bioethanol by volume is at least 85%, and
	"unleaded petrol" has the meaning given in section 1(3C) of the Hydrocarbon Oil Duties Act 1979.
	(7) The Secretary of State may, with the consent of the Treasury, by regulations amend sub-paragraph (6)."
	(5) In paragraph 1J(a), for "£165" there shall be substituted "£170".
	(6) In paragraph 1K(a), after "1st March 2003" there shall be inserted "and before 1st January 2007".
	(7) In paragraph 2(1)—
	(a) in paragraph (b), for "£30" there shall be substituted "£31",
	(b) in paragraph (c), for "£45" there shall be substituted "£46", and
	(c) in paragraph (d), for "£60" there shall be substituted "£62".
	(8) In Schedule 2 to the Vehicle Excise and Registration Act 1994, after paragraph 24 there shall be inserted—
	"Light passenger vehicles with low CO 2 emissions
	25 A vehicle is an exempt vehicle if—
	(a) it is a vehicle to which Part 1A of Schedule 1 applies, and
	the applicable CO 2 emissions figure (as defined in paragraph 1A(3) and (4) of that Schedule) for the vehicle does not exceed 100 g/km."
	(9) Paragraph (8) shall come into force on 23rd March 2006; but nothing in that paragraph shall have the effect that a nil licence is required to be in force in respect of a vehicle while a vehicle licence is in force in respect of it.
	(10) The rest of this Resolution shall have effect in relation to licences taken out on or after that date.
	And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
	9. Value added tax (gaming machines)
	Resolved,
	That provision (including provision having retrospective effect) may be made amending section 23 of the Value Added Tax Act 1994.
	10. Value added tax (buildings and land)
	Resolved,
	That provision may be made for, and in connection with, conferring power on the Treasury—
	(a) to substitute Schedule 10 to the Value Added Tax 1994 for the purpose of rewriting that Schedule with amendments, and
	(b) to amend Group 1 of Schedule 9 to that Act.
	11. Value added tax (works of art, antiques, etc)
	Resolved,
	That provision may be made amending section 21 of the Value Added Tax Act 1994 in relation to works of art, antiques, collections and collector's pieces.
	12. Value added tax (missing trader intra-community fraud)
	Resolved,
	That, for the purposes of value added tax, provision may be made for, and in connection with, securing that—
	(a) supplies of goods made to persons carrying on businesses are treated for the purposes of Schedule 1 to the Value Added Tax Act 1994 as their taxable supplies made in the course or furtherance of their businesses, and
	(b) taxable persons carrying on businesses to whom supplies of goods are made by other taxable persons account for and pay value added tax on those supplies.
	13. Value added tax (face-value vouchers)
	Resolved,
	That provision may be made amending, or making amendments connected with, Schedule 10A to the Value Added Tax Act 1994.
	14. Income tax (charge and rates for 2006–07)
	Resolved,
	That income tax shall be charged for the year 2006–07, and for that year—
	(a) the starting rate shall be 10%;
	(b) the basic rate shall be 22%;
	(c) the higher rate shall be 40%.
	And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
	15. Corporation tax (charge and rate for 2007)
	Resolved,
	That corporation tax shall be charged for the financial year 2007 at the rate of 30%.
	16. Corporation tax (small companies' rate and fraction for 2006)
	Resolved,
	That for the financial year 2006—
	(a) the small companies' rate shall be 19%, and
	(b) the fraction mentioned in section 13(2) of the Income and Corporation Taxes Act 1988 shall be 11/400ths.
	17. Corporation tax (starting rate and non-corporate distribution rate)

Mr. Deputy Speaker: With the agreement of the House I propose to put together the Questions on the remaining motions.
	Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Jeremy Wright: Thomas Archer died in his father's arms on 30 October 2005. Thomas, who lived a few streets away from me in Rugby, was a little over two years old, and died of a brain tumour.
	In July last year, Thomas became ill and displayed several symptoms that caused his parents concern, including substantial loss of balance. Twice during that month they took him to their local general practitioner's surgery, and twice an ear infection was diagnosed. Antibiotics were prescribed, but Thomas did not get better. Just before the family left for a holiday in France, Thomas was taken to an out-of-hours GP's surgery because his parents were still worried. Again, they were told that there was nothing to worry about. By that point three doctors had diagnosed mild illness, and all three were wrong.
	A few days after arriving in France, Thomas was taken to see a French doctor who recommended further tests. Scans revealed a life-threatening medullablastoma in his brain, which was removed the following day. Thomas returned home, but although he appeared to be making a good recovery while subject to chemotherapy, his parents were told on 14 October that his cancer had spread throughout his brain and spinal cord. Thomas died just over two weeks later, some three months after the brain tumour had been diagnosed.
	But Thomas's parents, George and Karen Archer, who are sitting in the Public Gallery, are determined that some good should come of their son's death, and it is due primarily to their courage and determination that I sought this debate. Karen and George have already managed to raise over £15,000 for the children's brain tumour research centre at Nottingham university. I pay tribute to them for that, and for what they have already done to raise awareness of this terrible condition. I also pay tribute to their friends and neighbours who did so much to make Thomas's last weeks special, even bringing forward Christmas when it became clear that he would not live to see it, putting up decorations early and arranging for artificial snow to cover the street where Thomas lived.
	Thomas was not, of course, the only child to die of a brain tumour last year. Approximately 100 do so every year, and such cancers are now the cause of more childhood deaths than any other disease. The House has debated this important issue before, to the credit of my hon. Friend the Member for Buckingham (John Bercow), who, I am pleased to say, is in his place this evening. He secured an Adjournment debate on the subject on 26 April 2004. I am indebted to him for the speech that he made on that occasion, and also to other hon. Members whose contributions highlighted the many aspects of treatment and support that children with brain tumours, and their parents and carers, so desperately need.
	I do not intend to repeat the points made then, but I commend the report of the debate to all with an interest in the subject. As my hon. Friend said,
	"the issue of children with brain tumours is under-debated, under-reported and underfunded."
	It was, and it remains so.
	Replying to the debate, the then Under-Secretary of State for Health, the hon. Member for South Thanet (Dr. Ladyman), recognised that these matters had been little considered, and said
	"I hope that opportunities can be found further to debate them in coming months because they clearly need to be explored."— [Official Report, 26 April 2004; Vol. 420, c. 721–25.]
	I regret to say that there have been no such opportunities for childhood brain cancers to be debated until tonight.
	I do not seek to suggest that no progress has been made in the treatment of cancer generally, or that this debate should be used to condemn the NHS for failing Thomas Archer. I do, however, wish to mention two respects in which I believe that improvements may be made in terms of this highly distressing condition.
	First, there is the need to identify childhood brain tumours at an early stage more often. I recognise the great difficulty of diagnosing such conditions, the symptoms of which may be almost indistinguishable from those of other much less serious illnesses, and I cannot judge the general practitioners who failed to do so in the case of Thomas Archer. The fact remains, however, that a French doctor detected brain cancer where three British doctors did not, and, regardless of blame, we should investigate the reasons for that. I hope the Minister will be spurred by this case to think again about what enhancements to the education and awareness of, in particular, family doctors may be necessary.
	Secondly, on the importance of effective research, the Minister will know that the NHS spends less on brain cancers than on other cancers, leaving a gap to be filled by the voluntary sector. That, too, is a problem. I understand that national cancer charities spend less than 4 per cent. of their annual research budgets on all forms of childhood cancer. Of course, I understand that the NHS in its current financial state cannot provide limitless resources for the funding of research into childhood brain cancers or, indeed, anything else. We must hope that some of the health research fund that the Chancellor announced in the Budget finds its way to such research. I understand too that, given the relatively small number of childhood cancers compared with adult cancers, there is bound to be a discrepancy in funding, although that compounds the problem, as pharmaceutical companies are also reluctant to invest for the same reason.
	There is, however, something practical that the Government can do to help without the need for substantial extra resources. If we look to medical science to provide new treatments for brain cancer in children, the worst thing that we can do is to put obstacles in the path of medical scientists. The strong view of the consultant who treated Thomas Archer is that the implementation of the European clinical trials directive has damaged such medical research.
	I readily concede that the serious injuries recently caused to one group of volunteers shows the need for some regulation of clinical trials, but it is vital that regulation does not become counter-productive. A recent editorial in the British Medical Journal by two Finnish researchers, discussing the impact of the directive Europe-wide, said:
	"at the outset many investigators were worried that the labour-intensive, bureaucratic and expensive endeavour of running a clinical trial would become worse. In particular, academic researchers funded by grants, who have so far performed most oncology trials, were worried that their resources might no longer suffice to meet the requirements of the new directive. A recent analysis of research since the directive suggests that many of those fears have been realised".
	The authors were referring to a report by the European Organisation for Research and Treatment of Cancer, which showed that clinical trial costs increased by 85 per cent. and that insurance costs doubled, following the coming into force of the directive, resulting in a 63 per cent. reduction in the number of new trials between 2004 and 2005.
	Those who suffer from childhood brain cancers cannot afford a reduction in research—they need more of it to be done—so I hope that the Minister will look again at the effect in the UK of the clinical trials directive and cut back on the paperwork, which is costing researchers too many precious hours that could be so much better spent. If those researchers can save more time, they can save more lives.
	I ask the Minister to meet the doctors at the Children's Brain Tumour Research Centre, so that she can hear directly from them about the problems that they face. So we are having this debate tonight because Thomas Archer died, but we are also having this debate so that others with the same condition may live. We all share that objective, and I ask the Minister to do all that she can to bring it about.

John Bercow: I follow colleagues in congratulating my hon. Friend the Member for Rugby and Kenilworth (Jeremy Wright) on raising this issue in terms that were measured, responsible and dignified, yet at the same time quietly passionate.
	I should like, if I may, briefly to make a number of other points. First, there is now a substantial body of serious research that suggests that a combination of radiotherapy and the use of temozolomide can significantly enhance survival rates for patients newly diagnosed with glioblastoma. Ministers need to take account of that fact to which they need to respond.
	Secondly, Roy Rampling, professor of neuro-oncology at the Western Infirmary in Glasgow is one of 36 consultants and specialists who have written to the Secretary of State for Health to argue that the use of temozolomide and carmustine implants is effective and represents value for money. They are challenging the judgment of the National Institute for Health and Clinical Excellence, which has made a preliminary recommendation against the use of such treatments. They, with their expertise, believe that is wrong.
	Thirdly, and finally, we have to take account of the views of those experts. Professor Rampling believes that the treatments to which I referred represent the biggest breakthroughs in the treatment of brain tumours in 30 years. We are entitled to ask the Minister, in the most sincere terms, why between two and three times as many people are being treated with temozolomide in Canada, France, Germany, Italy and Spain. Their doctors obviously think it makes sense.
	My appeal to the Minister is that she will consider the possibility that a wrong judgment has been made, keep an open mind, and listen to the evidence. Could there be a better way for her to do so than to come before a meeting of the all-party group on brain tumours, of which I am privileged to be chairman, where she could hear the arguments from those infinitely more expert than I will ever be and be offered the opportunity to respond?

Rosie Winterton: I congratulate the hon. Member for Rugby and Kenilworth (Jeremy Wright) on securing the debate, which has highlighted the tragic case of Thomas Archer and the courage and determination of his parents. I hope that the hon. Gentleman will allow me to express my deepest sympathy to them. The fact that we have quite a crowded Adjournment debate shows the importance attached to the issue.
	Before I turn to the some of the specific points that the hon. Gentleman made, I shall provide some background information about cancers among children. In the difficult circumstances of the debate, this is difficult to say, but, thankfully, cancer in children is rare and there have been remarkable improvements in survival rates over the past 30 years. Some of that improvement has been due to technical advances and the centralisation of care in specialist centres, as well as the hard work of clinicians and researchers. Seventy-five per cent. of children with cancer can now be cured, but I recognise that although survival rates for children diagnosed with brain tumours have improved in recent years, they are not, as the hon. Gentleman said, as high as for some other childhood cancers.
	The hon. Gentleman gave an extremely moving account of what happened to Thomas Archer. I hope he will understand that it is extremely difficult for me to talk about individual cases, but I can assure him that I certainly recognise the need to ensure that the signs and symptoms of cancer are picked up as soon as possible so that a quick and accurate diagnosis can be made. To put that in context, a GP will see on average only one child under 15 with cancer every 20 years, yet they will see many children each week with a wide variety of symptoms that could be cancer. It is important to recognise that they have a difficult job to do. In April 2000, we tried to support GPs in that respect by issuing "Referral guidelines for suspected cancer", which aimed to help them to identify patients, including children, who were likely to have cancer and so required urgent assessment.
	After the debate in 2004—I pay tribute to the hon. Member for Buckingham (John Bercow) for initiating it—the guidelines were updated by the National Institute for Health and Clinical Excellence and reissued in June 2005. That had been raised during the debate. The guidelines include a section on cancers in children and young people and specifically try to address the signs and symptoms of brain tumours. The Healthcare Commission is currently consulting on how to ensure that those standards are implemented across the country, so that there is consistency. I fully appreciate that that will not be of comfort to Thomas's parents at this point, but I hope that it shows that action is in hand to ensure that GPs are alert to possible symptoms of cancer in children and are able to act accordingly.
	The hon. Member for Rugby and Kenilworth also raised the issue of research into brain tumours. Again, that issue was raised in the 2004 debate. My Department has established the national cancer research network, which considers specialist research work on paediatric oncology. The network has a dedicated brain tumour group, which is currently running a range of studies on the diagnosis and treatment of brain tumours in children. Separately, my Department funds the childhood cancer research group at Oxford university, which maintains the national registry of childhood tumours. That is the largest population-based childhood cancer registry in the world. The Department also supports a senior clinical research fellow at Birmingham university to study a comparison of magnetic resonance spectroscopy and tumour genetics in childhood brain tumours.
	I know that we can always argue for more research into particular cancers, but I hope that I have been able to give some reassurance that particular research into childhood brain tumours is being carried out. Research into other childhood tumours can help our understanding in this area, too. I assure the hon. Gentleman that I will ensure that the National Cancer Research Institute is aware of the points that hon. Members have made.
	In addition, the hon. Gentleman raised some concerns about the clinical trials directive. As he acknowledged, it is important that we have in place proper protection for those participating in clinical trials, because of the risk that the trials may pose to individuals. I can assure him that we will assess the effects of implementing the directive, including a consideration of whether it is over-bureaucratic, as soon as reliable evidence is available. I will certainly take up his offer to meet the doctors he mentioned.
	The hon. Member for Buckingham expressed concern about NICE's preliminary recommendations, in December, on the use of carmustine implants and Temodal in the treatment of newly diagnosed high-grade glioma. Those recommendations were subject to a period of consultation, which ended on 1 February, and NICE's final recommendations are, as he said, expected to be published in August 2006. Those final recommendations can be appealed. NICE is an independent body, which we rely on to produce clinical and cost-effective guidance to the NHS—based on the latest available evidence and having considered the comments that it receives during consultation. It is difficult for Ministers to comment on some of these issues, but I will certainly take up his offer to meet the group that he talked about. As I have said, the recommendation is not the final one and, in the meantime, primary care trusts have the discretion to fund the treatments outwith the final recommendations.
	Points have been raised in the debate about the way in which services for children with brain cancer are organised and staffed. Again, those points built on some of the issues raised in the 2004 debate. In August 2005, NICE produced service guidance on how the NHS could improve services for children and young people with cancer, including those with brain tumours. The national cancer director has established a group, which he co-chairs with the national children's director, to help to implement the guidance. The group will certainly consider several of the issues raised by my hon. Friend the Member for Waveney (Mr. Blizzard), especially the need for members of the voluntary and charitable sector, such as the Ellie Savage memorial trust, to work with the NHS. I assure my hon. Friend that I will ensure that the two co-chairs of the group are aware of the ideas that he put forward in the debate so that they can examine them closely.
	The hon. Member for Castle Point (Bob Spink) raised the issue of children's hospices. I am sure that he is aware that we made a number of commitments in our manifesto on how to increase palliative care, and we will make further announcements on the matter, including on children's hospices. I am well aware of the point that he raised and certainly undertake to write to him about it.
	I hope that I have been able to give some reassurance to hon. Members who have spoken in the debate and, indeed, to Thomas's parents, who, as the hon. Member for Rugby and Kenilworth said, have been campaigning, raising money and trying to raise awareness. It is tribute to everyone who has spoken in the debate that they have added to that awareness campaign. There is certainly still more than we need to do to improve services for children with brain tumours, but we have set in train several actions, which have arisen because of points that hon. Members have made in the House previously. I hope that those actions will bring about change in an area that anyone who has heard the debate will realise is extremely important and something that still tragically affects too many children and, of course, their parents.
	Question put and agreed to.
	Adjourned accordingly at twelve minutes to Midnight.